FTC Charges HomeAdvisor With Cheating Small Businesses

The Federal Trade Commission (FTC) on Friday (March 11) charged Denver-based HomeAdvisor, Inc., with “a wide range of deceptive and misleading tactics” by selling home improvement project leads to service providers, including small business owners, since at least the middle of 2014.

HomeAdvisor “has made false, misleading or unsubstantiated claims about the quality and source of the leads the company sells to service providers,” according to the FTC complaint. That includes general contractors and small lawn care businesses.

“Gig economy platforms should not use false claims and phony opportunities to prey on workers and small businesses,” said Samuel Levine, director of the FTC’s Bureau of Consumer Protection, in the FTC press release. “Today’s administrative complaint against HomeAdvisor shows that the FTC will use every tool in its toolbox to combat dishonest commercial practices.”

HomeAdvisor told service providers that its leads resulted in home improvement jobs at rates higher than what its data showed, according to the complaint. HomeAdvisor also misled service providers about the cost of an optional one-month subscription to a software platform that HomeAdvisor sold along with its leads, according to the FTC.

These claims caused some service providers to follow up on leads “that are below the quality HomeAdvisor promises, and [spent] even more time seeking refunds from the company for those leads,” according to the press release.

HomeAdvisor also does business as Angi Leads and HomeAdvisor Powered by Angi.

An Angi spokesperson denounced the charges and said the company would fight them.

“This lawsuit is meritless and shows how out of touch the FTC is with the enterprising American small business owner of today,” the Angi spokesperson said in response to the FTC’s complaint. “Fraud and deception don’t work as business models. If our pros don’t win, we don’t win. We’ve been in business for over 20 years. That longevity is thanks to putting our customers first.

“We will vigorously fight these outrageous allegations,” the Angi spokesperson added.

Related: DOJ, FTC Summit May Shed Light on Merger Guidelines Reform

Last week, the FTC announced it would cohost a conference April 4 with the Department of Justice’s Antitrust Division, during which Assistant Attorney General Jonathan Kanter and FTC Chair Lina M. Khan, as well as senior staff from both agencies, will guide discussions about modernizing merger guidelines and interagency collaboration.