Care.com agrees to $8.5 million settlement amid accusations of deceptive practices

Care, an online platform that connects caregivers with families, has agreed to an $8.5 million settlement after being accused of deceptive practices, including inadequate background checks, misleading earnings estimates, and unlawful tactics that hindered subscription cancellations.

Care, based in Austin, Texas, provides a platform for finding nannies, babysitters, and adult caregivers, charging both job posters and job seekers a monthly fee for its services. The Federal Trade Commission (FTC) filed a complaint against the company on August 26, with the settlement being reached two days later.

The FTC has announced plans to refund the money to affected customers.

Inadequate Background Checks

Care offers a background check service for families seeking caregivers for their children or elderly loved ones, which it charges extra fees for. However, the FTC's investigation revealed that this service is not as reliable as advertised. "Care.com misled consumers into believing that caregivers on its platform had undergone rigorous background checks, when in reality, many individuals with criminal histories were approved," the complaint states.

Misleading Marketing to Attract Caregivers

The investigation also uncovered that Care used inflated job numbers and baseless earnings claims to lure caregivers to the platform. "Care.com has not actually tracked earnings for jobs found on its platform and has little to no credible information to back up its earnings claims," the FTC stated.

Many job seekers reported frustration after applying to numerous jobs without receiving responses. The investigation found that Care.com only allowed paying job posters to reply to caregivers, compelling job posters to pay a subscription and wasting job seekers' time on jobs they had little chance of securing.

Unlawful Tactics to Prevent Cancellations

The FTC's complaint also accuses Care of employing deceptive tactics, often referred to as "dark patterns," to obstruct both job posters and job seekers from canceling their subscriptions. Consumers attempting to cancel their Care subscriptions were required to navigate through multiple unrelated links before accessing cancellation information. The lawsuit notes that many users expressed frustration over the difficulty in finding cancellation options, with some resorting to online searches for guidance.

Even when consumers reached the cancellation process, they encountered numerous obstacles designed to discourage cancellation. These included multi-page questionnaires, confusing language, warnings about the consequences of cancellation, and prompts to purchase additional memberships before they could complete the process.

Settlement Requirements

"The order announced today puts a stop to these unlawful practices and helps ensure an honest marketplace for families looking for care and caregivers looking for work," said Samuel Levine, Director of the FTC's Bureau of Consumer Protection, in a statement.

Under the terms of the proposed settlement, Care will be required to pay $8.5 million to the FTC for consumer refunds related to its unlawful practices. The settlement mandates that Care only make earnings claims that are truthful and backed by evidence, and that it accurately represents the number of available jobs posted by legitimate employers.

Additionally, Care must provide a straightforward cancellation method for any subscription services offered on the platform.