Care.com misled caregivers and families — and made it ‘impossible’ to cancel, the FTC claims

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Care.com will pay more than $8 million to settle claims from the Federal Trade Commission alleging that the website and app have deceived caregivers and families for years and coerced them into paid subscriptions that were difficult to cancel.

The claims are part of a federal complaint filed by the FTC, an agency that enforces consumer protection laws, that tracked allegations from tens of thousands of people who used the platform from 2019 to 2022. The site and app connect families with providers of child care, elder care, care for people with disabilities and pet sitters. The $8.5 million settlement will be used to refund affected users.

According to the FTC’s complaint, Care “grossly inflates” the number of jobs available on its platform for caregivers — many of whom never hear back from potential employers. The website requires that both families and potential employees pay memberships of up to $155 a year in order to communicate with each other. Then, the complaint alleges, Care institutes a multi-step approach that prevents many users from canceling their subscriptions.

Samuel Levine, director of the FTC’s Bureau of Consumer Protection, said in a statement that the settlement “puts a stop to these unlawful practices, returns millions of dollars to consumers, and helps ensure an honest marketplace for families looking for care and caregivers looking for work.”

But in response, the company, which is also known simply as Care, put out a statement emphasizing that the settlement is “in no way a validation of the FTC’s claims.” The company is  confident in its position and was prepared to litigate the case for the next several years if necessary, the statement continues, but decided to settle to “resolve this matter now and keep our focus on helping our customers.”

A Care user can sign up for a free basic membership, which doesn’t auto-renew, and input information about the kind of care they’re looking for and how much they’d be willing to pay. That generates a job posting — one that users are typically unaware is being created, the FTC’s complaint alleged. Families can see job applications that come in, but to open them or communicate with job seekers, users need to upgrade to the premium membership, which costs $39.99 monthly, $75.99 quarterly or $155 annually. Caregivers must have a premium membership to submit a job application.

The FTC alleges that since January 2019, that has resulted in millions of job postings from users who never upgraded to premium and thus never hired providers. But those numbers were used to make the Care platform appear to “offer more jobs,” and so “to have a higher demand for providers than truly exists,” the FTC said in its complaint.

In its response, Care stated that it “would not be in business for long if we manipulated optics, inflated statistics and attempted to trick our customers.” Some families prefer to see a level of interest in their job post before upgrading to premium, the response continued, calling the basic membership a “try before you buy” opportunity.

“When a seeker sees the array of caregivers available, the commitment to premium membership — which enables seekers to contact and hire caregivers — follows naturally,” Care said.

The FTC also claims that Care has been deceptive about what caregivers can expect to earn. On the Care platform, it advertises average pay rates for jobs. But in advertisements on third-party websites, Care says prospective employees can earn even more. For example, from October 2019 to December 2020, the FTC alleges, Care advertised an average rate for caregivers of older adults as $13 to $14.50 an hour. That same advertisement on a third-party site claimed those jobs were “starting at $18/hr,” the complaint said.

From January 2019 to March 2022, 4.7 million job postings, or 56 percent, were created by basic memberships that never resulted in hires — but the information in the postings was used to create pay expectations for caregivers. “Care’s earnings claims also rely upon millions of hypothetical job postings,” the FTC’s complaint said.

In response, the company’s statement said that it never sets rates or makes “promises about earnings.”

“The data we provide about posted rates is based solely on what families say they are willing to pay, which varies significantly. Given the size of our platform, the potential earnings data we provide is at scale, and helps maintain a balanced and fair market for care,” the Care response continued.

Another point of frustration for job seekers, the FTC alleges, is that positions created through families signing up for basic memberships are advertised as being available “right now,” even though caregivers wouldn’t be able to contact any of those families directly.

The complaint quotes a review from a caregiver who tried using the site in 2019: “Have been trying to get a job as a nanny. Have applied to 10 jobs a day for 1 month,” it read. “Even upgraded my membership to premium NOT A SINGLE RESPONSE! I have excellent local references credentials and lots of experience. Amazed to read other reviews And to learn other people have the same issues with the site. I get better response on craigslist. Waste of time and $$$.”

But leaving the site and canceling a membership has also proven difficult, the FTC alleges. In order to cancel, users need to click through numerous links, most of which don’t mention cancellation. The process to cancel a premium membership involves navigating through six different pages, past at least four exits from the cancellation process and two warnings about the consequences of canceling, one offer of a different membership, as well as completing three pages of questions, the agency states.

In the complaint, the FTC quotes a user who told the company that the website “is designed to hide the ability to cancel,” while others called the process “impossible.” According to the agency, Care also tested ways to make cancellation even more difficult.

Care’s statement maintains that members “can easily cancel if they wish,” adding that the company has further streamlined that process and includes cancellation instructions in confirmation emails that users receive upon joining.

In October 2021, the FTC sent Care a letter warning of potential civil penalties for what it called “unfair or deceptive” trade practices and violations. Then in March 2022, the agency requested documents to substantiate Care’s claims about how much caregivers could expect to earn. Care continued with its practices despite the ongoing investigation, the FTC alleges. The commission voted unanimously to file a federal complaint.

As part of the settlement, Care will be required to only post jobs that caregivers can actually be hired for — likely only postings made by premium users. Claims about how much caregivers can expect to earn must be backed up with evidence, and subscriptions must be easy to cancel, the FTC said.

“Deceptive earnings claims and illusory job leads not only rob people of their time and money but also can distort job markets by artificially depressing wages, keeping people out of work longer, and undoubtedly pushing some into more desperate precarity,” FTC Commissioner Rebecca Kelly Slaughter said in a statement .

Caregiving has been in crisis in the United States for years — certainly since the pandemic, when thousands of caregiving jobs disappeared . Child care often costs parents more than their rent or mortgage , and the industry is struggling to keep providers who are willing to work for some of the lowest wages in the country.

In its statement, Care said that, given that landscape, “it is disappointing that the FTC has chosen to attack trusted businesses who are part of the solution.”

“Given the care crisis in America, we believe our collective energy as a country should be on solutions, not nitpicking attacks,” the statement continued. “Care.com intends to keep our focus on what matters: American families and the hardworking caregivers who support them.”