FTC Charges HomeAdvisor With Cheating Small Businesses

The Federal Trade Commission (FTC) on Friday (March 11) charged Denver-based HomeAdvisor, with “a wide range of deceptive and misleading tactics” by selling home improvement project leads to service providers, including small business owners, since at least the middle of 2014.

HomeAdvisor “has made false, misleading or unsubstantiated claims about the quality and source of the leads the company sells to service providers,” according to the FTC complaint. That includes general contractors and small lawn care businesses.

HomeAdvisor, which also does business as Angi Leads and HomeAdvisor Powered by Angi, recruits service providers to the company’s network through a series of promotional materials and sales agents. Once service providers have joined, the company sells them leads to potential customers for home services like kitchen remodeling or lawn care.

HomeAdvisor told service providers that its leads resulted in jobs at rates higher than supported by the company’s own data, the FTC said. HomeAdvisor also misled service providers about the cost of an optional one-month subscription to a software platform that HomeAdvisor sold along with its leads.

“Gig economy platforms should not use false claims and phony opportunities to prey on workers and small businesses,” said Samuel Levine, director of the FTC’s Bureau of Consumer Protection, in the FTC press release. “Today’s administrative complaint against HomeAdvisor shows that the FTC will use every tool in its toolbox to combat dishonest commercial practices.”

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