Care.com is paying $8.5 million in refunds after the company reached a settlement with the Federal Trade Commission over misleading job postings and failed subscription cancellations.
The website, which connects people with babysitters, elderly caregivers or house sitters, used “inflated job numbers and baseless earnings claims” to deceive both customers and employees, the FTC said in a statement.
“The order announced today puts an end to these unlawful practices, returns millions of dollars to consumers and helps ensure an honest marketplace for families seeking care and caregivers seeking work,” said Samuel Levine, director of the FTC’s Bureau of Consumer Protection.
According to Forbes, Care.com has helped approximately 29 million families in the United States find babysitters since its founding in 2006.
To communicate with a caregiver on Care, both job providers and job seekers must create an account on the site with an auto-renewable subscription, the press release states. The FTC says Care “grossly exaggerated” the number of jobs available on the site and made “unsubstantiated claims” about how much money users could earn by taking those jobs.
The website boasted hourly and weekly wages that were “designed to entice consumers to pay for subscriptions,” although according to the FTC, there was “little to no data” to support the claim that employees actually made that much money.
In a 2021 advertising campaign, the company advertised jobs starting at “$18/hour” while also stating on its website that the national average wage for babysitters — and care workers — is between $13 and $14.25 per hour, the FTC complaint said.
In a separate statement, Care said the settlement with the FTC was “in no way an endorsement of the FTC’s allegations” and that it would not change the company’s business operations.
Care said in the statement that the subscriptions that users must renew are actually an annual “screening fee.”
“We wouldn’t be in business long if we manipulated optics, inflated statistics and tried to deceive our customers,” Care said. “We’ve found that many care seekers prefer to see if their job posting is interesting before purchasing a premium membership, and our basic service provides that opportunity to try the site before buying.”
The company added that it does not set or make any promises about yield rates and that it has streamlined its account closure process.
