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HomeAdvisor May Pay $7.2 Mil to Contractors Per FTC Order

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HomeAdvisor May Pay $7.2 Mil to Contractors Per FTC Order

Contractors could receive a refund if affected by HomeAdvisor's "deceptive" tactics, according to the Federal Trade Commission


By Caroline Broderick January 23, 2023
ftc homeadvisor
Photo: Andriy Blokhin | stock.adobe.com

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.

 

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written by

Caroline Broderick

Caroline Broderick is the Managing Editor for Pro Remodeler. Most recently, she served as the associate editor for PR's sister publications, Pro Builder, Custom Builder, and PRODUCTS where she covered design, building products, trends, and more in the residential construction industry. She can be reached at cbroderick@sgcmail.com.
 


Comments (5)

  • Submitted by Thomas Carey (not verified) on Tue, 01/24/2023 - 15:37

    Permalink

    My firm was a very early member of the H.A. efforts.
    They never provided a single lead. I have built more the 300 housing units over the past 30 years. This company was a total waste of time
    Thomas Custom Builders Goshen Ct

  • Submitted by William "Bill"… (not verified) on Tue, 01/24/2023 - 15:59

    Permalink

    This practice was only part of it, as they charged everyone the same amount if you received a lead, which everyone did that was signed up, one month I had a bill for 300.00 plus but on work out of it. Happy that got taken care of.

  • Submitted by Jim Wright (not verified) on Tue, 01/24/2023 - 17:24

    Permalink

    Paid for leads when they first started. Leads they sent was not leads, only some one wanting an estimate . I was promised leads that customer was screened and ready to buy. Not the case. dropped it after 6 months.

  • Submitted by Mark (not verified) on Wed, 01/25/2023 - 07:03

    Permalink

    I signed up in circa 2016 and paid the initial fee. I was told when a lead comes in, I need to call right away. However I wasn't told that the same lead will also be sent to other contractors who would also be charged for the SAME lead. AND not to mention, the leads were random numbers and not once did I get a hold of a homeowner nor got a call back after leaving voicemails. So I put a complaint with the Denver BBB for their deceptive practices and within 24 hours I received a call from HA marketing department. They asked me to remove my complaint with the BBB and they will refund me half of what I had spent on leads. I think this company should be shut down. That $7.2 million should be $7.2 billion.

  • Submitted by Andrew (not verified) on Wed, 01/25/2023 - 10:05

    Permalink

    We kept getting charged for leads, yet we never actually received the leads. The leads you did receive always had multiple other contractors beating down the homeowner. We tried to cancel the service numerous times. They just kept charging the credit card even with written (email and mailed letters) demanding they stop. They never listened and when you would call to complain they would just try to give you discounted leads to no work. We ended up having to close that credit card and open a new credit card since they would never listen. HA should be shut down, they are not trustworthy and the whole company is deceptive.

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