HomeAdvisor May Pay $7.2 Mil to Contractors Per FTC Order

The Federal Trade Commission has ordered HomeAdvisor, an Angi-affiliated lead gen service, to pay back home service providers in response to the company’s “deceptive and misleading tactics.”

The order comes almost one year after the FTC filed an official complaint against HomeAdvisor for its methods in selling leads to contractors. 

The FTC’s order, announced January 23, calls on HomeAdvisor to pay $7.2 million, which will be used to refund defrauded contractors through two redress funds: one for payments up to $30 for misled service providers and another for payments of $59.99 for those who were told their first month of HomeAdvisor’s scheduling and payment service, called mHelpDesk, would be free. HomeAdvisor would also be barred from continuing its inaccurate claims and “deceptive conduct.”

HomeAdvisor told FOX Business that the FTC's order does not confirm any wrongdoing, but is instead a settlement agreement.

"We’ve earned the privilege of becoming trusted partners to hundreds of thousands of local plumbers, roofers, general contractors and electricians—the people who help protect Americans’ greatest asset: our homes," the spokesperson told FOX. "Finding and helping homeowners to get a job done well is the daily work of our team members, and you'll find no company working harder for the American home service professional than Angi."

Once filed, FTC complaints are then subject to public comment for 30 days, after which the FTC determines whether or not to make the order final.

The 30-day period is open for affected contractors to submit complaints, explains an FTC spokesperson, whether it be sharing their personal stories about their experience with HomeAdvisor or complaints on the FTC orders themselves. 

If submitting a complaint based on your experience, the FTC suggests submitting as much information as possible, including, but not limited to: your name, location, when you used the service, why you were not provided with adequate service, and receipts. The more complaints, the better the FTC can assist affected contractors, explained a spokesperson.

There is not currently a way to apply for the refund nor an idea of when the redress funds will be distributed, says the FTC. When comments open, consumers can submit them at ftc.gov/policy/public-comments

The Original Complaint

The FTC alleged in March 2022 that HomeAdvisor provided worse leads than promised and knowingly promoted a lead conversion rate higher than the company’s data supported.

Contractors joining HomeAdvisor paid a yearly fee of $287.99 and an additional cost for each lead HomeAdvisor supplied, though the leads were sometimes homeowners not intending to hire a service provider, homeowners out of the contractor’s geographical area, and third-party purchased leads, according to the original complaint.

These “misleading” practices have been ongoing since 2014, the FTC alleges.

MHelpDesk was part of the complaint as well. FTC said the company falsely advertised one month free of mHelpDesk ($59.99/month) if contractors signed up for an annual membership, but contractors were charged for both services.