IAC’s Care.com subsidiary has agreed to pay $8.5 million to settle allegations by the U.S. Federal Trade Commission (FTC) that it engaged in deceptive advertising practices to entice people into paying for subscriptions to its platform. The settlement was announced by the FTC on Monday.
The FTC claimed that Care.com exaggerated the number of available jobs and potential earnings on its platform to lure individuals into purchasing auto-renewing memberships. It also alleged that the company made it difficult for customers to cancel their subscriptions through misleading website designs.
Under the settlement, Care.com neither admitted nor denied any wrongdoing. The $8.5 million payout will be used to provide refunds to affected customers.
The FTC stated that around 2.9 million consumers in the U.S. purchased at least one auto-renewing membership from Care.com between January 2019 and 2021. The settlement requires Care.com to establish a straightforward mechanism for customers to avoid unwanted renewals and to substantiate the employment claims made on its website.
Despite the settlement, IAC shares were trading slightly higher on Monday, adding 0.4% in early trading. The company, which owns brands such as Angie’s List, Investopedia, and The Daily Beast, has not provided an immediate statement regarding the matter.
The FTC’s action underscores the importance of transparency and honesty in advertising, particularly in the rapidly growing gig economy. As consumers increasingly rely on online platforms for employment opportunities, regulators are closely monitoring these companies to ensure they are not engaging in deceptive practices that could harm individuals seeking work.
