Additional Information for HomeAdvisor

Federal Trade Commission v Home Advisor, Inc.

The following describes a government action that has been resolved by either a settlement or a decision by a court or administrative agency. If the matter is being appealed, it will be noted below.

On January 23, 2023, the United States of America before the Federal Trade Commission and HomeAdvisor, Inc., a corporation, d/b/a Angi Leads, d/b/a HomeAdvisor Powered by Angi entered into an Agreement Containing Consent Order requiring HomeAdvisor to pay up to $7.2 million for using a wide range of deceptive and misleading tactics in selling home improvement project leads to service providers, including small businesses operating in the “gig” economy.

The administrative order also bars HomeAdvisor from the deceptive conduct detailed in the Commission’s complaint against the company, which the complaint alleged occurred over many years, and sets up two redress funds to provide money to defrauded service providers. The administrative order will be subject to public comment after which the Commission will decide whether to make the order final.
HomeAdvisor, which also does business as Angi Leads and HomeAdvisor Powered by Angi, recruits service providers, such as general contractors and lawn care businesses, to join the company’s network. Once service providers join the network, HomeAdvisor sells them leads, which the service providers use to contact potential customers for home repair and maintenance projects.

Service providers who join HomeAdvisor’s network generally pay an annual membership fee of $287.99, in addition to a separate fee for each lead they receive. As part of their HomeAdvisor membership package, many service providers have also paid an additional $59.99 for an optional one-month subscription to a service called mHelpDesk, which includes software that helps with scheduling appointments and processing payments.

The FTC’s March 2022 administrative complaint against HomeAdvisor charged that since at least mid-2014 it has made false, misleading, or unsubstantiated claims about the quality and source of the leads the company sells to service providers who are in search of potential customers. For example, the complaint alleged that, while HomeAdvisor has represented that service providers only will receive leads matching the types of services they provide and their preferred geographic area, many of them do not.

The complaint also alleged that HomeAdvisor often tells service providers that its leads result in jobs at rates much higher than it can substantiate. Finally, the complaint alleged that HomeAdvisor’s sales agents misrepresented that the optional one-month mHelpDesk subscription was free.

In addition to requiring that HomeAdvisor pay up to $7.2 million for redress, the proposed order prohibits the company from making any false or misleading claims regarding its leads, including that they concern individuals who are ready to hire a service provider or who submitted a request for home services directly to HomeAdvisor. It also bars HomeAdvisor from misrepresenting its products as free when they are not, or making unsubstantiated claims about the rate at which its leads convert into paying jobs.

The redress program included in the order would administer two separate funds. The first would make payments of up to $30 to service providers affected by HomeAdvisor’s misrepresentations about its lead quality. The second would make payments of up to $59.99 to service providers who were told that the first month of their mHelpDesk subscription was free.

The Commission vote to accept the proposed consent agreement was 4-0. The FTC will publish a description of the consent agreement package in the Federal Register soon. The agreement will be subject to public comment for 30 days, after which the Commission will decide whether to make the proposed consent order final. Instructions for filing comments will appear in the published notice. Comments must be received 30 days after publication in the Federal Register. Once processed, comments will be posted on Regulations.gov.

For more information, please contact the Federal Trade Commission at www.ftc.gov or (202) 326-2222.

The People of the State of California v. HomeAdvisor Inc. et al.

The following describes a pending government action that has been formally brought by a government agency but has not yet been resolved.  We are providing a summary of the government’s allegations, which have not yet been proven. 

On March 14, 2018, the San Francisco District Attorney has entered a complaint for permanent injunction, civil penalties, restitution, and other equitable relief against HomeAdvisor Inc. et al.  The complaint alleges that HomeAdvisor used radio and television ads that misled consumers into thinking service personnel hired through the platform have all passed criminal background checks. The district attorney is seeking a permanent injunction that would require the defendants to stop making false and misleading statements, as well as civil penalties and restitution. A preliminary injunction date is set for April 12, 2018.  This matter is pending.

On May 30, 2018, The San Francisco Superior Court granted a preliminary injunction requiring Homeadvisor to stop airing misleading advertisements that allegedly imply that all personnel entering a consumer's home have passed a background check.  https://sfdistrictattorney.org/sites/default/files/Document/2018-05-24%20Preliminary%20Injunction.pdf

In response to these charges, the business provided the following statement:

"HomeAdvisor feels it is important to provide some context and a short response about this matter, which only relates to the State of California.  First and foremost, the action does not allege any problem with HomeAdvisor’s background check program (described here https://www.homeadvisor.com/screening/ ), that HomeAdvisor failed to conduct appropriate background checks, or that anyone was actually harmed by someone who was not background checked.  Instead, it alleges that California consumers may have been confused by some of our television or radio advertising about the scope of the background check program, even though the San Francisco District Attorney has failed to identify a single California consumer who was misled after more than a year of investigation.  Further, we note that a California court already denied the San Francisco DA’s initial request for an injunction based on the same allegations, and we are confident that the court will rule the same way on April 12.  We are proud of the service that HomeAdvisor provides and stand behind our advertising."

On April 12, 2022, BBB recognized multiple patterns of complaints regarding billing and customer service issues. They were grouped into 2 categories:

 

• Business Owners/Contractors allege signing up with HomeAdvisor and setting a monthly expense budget; at the end of the month business owners find out that HomeAdvisor's charges are exceeding the agreed upon expense budget. Contractors/Business Owners also allege signing up with HomeAdvisor under the impression that they will only be charged for leads or “Opportunities” if their business actually gets the job. Business owners further claim  they are being charged each time they press “Interested” in the opportunity, even if it includes incorrect information on which they can’t follow up with. Additionally, business owners assert these issues are leading to high unpaid invoices that eventually get sent to collections and/or are settled with a discount.

 

• Consumers allege being charged for more than the agreed-upon rate or being up-charged from their pre-paid rate. Consumers also contend having issues with contractors not showing up to the appointments, changing appointments last minute, and/or receiving minimal or no assistance from the business when incidents occur.

 

On May 25, 2022, HomeAdvisor provided the following response to the Business Owners/Contractor’s allegations:

 

“HomeAdvisor’s enrollment process requires pros, before joining the network, to review and affirmatively agree to an “Agreement to Key Terms,” which instructs the pro to review, and provides direct links to, the Terms and Conditions and Key Provisions page on the website. It also clearly and conspicuously explains that, among other things: (1) Project leads are not guaranteed jobs; (2) Standard leads will automatically be deemed accepted by pros and carry automatic charges going towards a monthly spend target set by the pro; (3) Once a pro is approved to join the network, the pro will be billed a membership fee; and (4) Opt-in leads are available and will incur additional charges. By checking the box to confirm the Agreement to Key Terms, the pro indicates that it agrees to these provisions, as well as to the other terms and conditions. The Key Provisions page describes how leads work, including costs; how to receive credits; what a spend target is; that pros are charged for leads regardless of whether the lead is converted to a job; and that there are no guarantees about how many leads a pro can convert to jobs. The Terms and Conditions (which have always been publicly available on HomeAdvisor’s website) provide even more detailed information about how HomeAdvisor works and how various homeowners may submit service requests that are then provided to one or more pros as leads.

 

To increase opportunities for jobs for pros and to improve the prospects that homeowners will find a pro to complete their projects, HomeAdvisor provides “Opportunity Leads,” which either are slightly outside the pros coverage area or involve tasks pros aren't currently buying leads for but are likely within its area of expertise. Pros are provided with a “free look” at these Opportunity Leads, and the pro is not charged unless it affirmatively accepts the lead. When Opportunity Leads are presented to a pro for consideration, HomeAdvisor conspicuously identifies them as Opportunity Leads that may fall slightly outside the pro profiled tasks and/or location.”

 

Since the business disagreed with the Business Owners/Contractor’s allegations; on May 25, 2022, BBB requested information/documentation to validate the business’ perspective.

 

On May 26,2022, the business declined to provide the requested information and provided the following response:

 

“We are very confident in the process of pros accepting terms and conditions, especially when it comes to pricing and material terms. They must physically check a box to agree with those main points that allegedly they "didn't know about".”

 

BBB requested a response from the business regarding the second pattern of complaints about Consumer’s allegations. However, as of June 13, 2022, the company has not responded to BBB's request to address the pattern.

On April 12, 2022, BBB contacted HomeAdvisor concerning a contractor’s website that had a “contact form”; in response to filling out the form consumers receive an email from HomeAdvisor with a list of contractors in their area as well as phone calls from contractors who believe the consumer is a verified lead.

The contractor’s website is www.gouldfamilycontractors.com. BBB could not locate information about Gould Family Contractors being a legitimate business and an active contractor.

On May 25, 2022, HomeAdvisor provided the following response:

“We do not allow leads from “fake contractor's websites.” The sites you provided are legitimate sites with legitimate businesses who refer the business when they cannot do the work themselves. These sites also state that the consumer may be matched to one of their partners, including Angi.”

On May 25,2022, BBB requested information/documentation regarding Gould Family Contracting as a legitimate business and active contractor. Despite written requests, as of June 13, 2022, HomeAdvisor has not responded to BBB’s request.

Advertisements should be truthful, sincere offers to sell. Advertisers have a responsibility to provide substantiation for all claims made and should be able to provide that substantiation upon request.  All advertising that may mislead or deceive consumers should be avoided. An advertisement as a whole may be misleading by implication, although every sentence separately considered may be literally true. Misrepresentation may result not only from direct statements, but by omitting or obscuring a material fact.

For additional information on the Code of Advertising, please visit https://www.bbb.org/code-of-advertising