Care.com to pay $8.5 million for deceiving caregivers about wages and job availability

If you entered your zip code on Care.com, an online platform for finding care, it would show hundreds or thousands of nearby jobs with high hourly rates. However, this was deception. The Federal Trade Commission (FTC) has ordered Care.com to pay $8.5 million in damages.

Care.com is an online marketplace for finding childcare, senior care, home care, care for those with special needs, and other services.

The FTC says that it has systemically deceived caregivers who were looking to help others. On the other hand, Care.com also failed families seeking care with no simple way to cancel their paid memberships.

“Care.com misled workers about how many jobs were available on the platform and how much they could earn – and made it hard to cancel subscriptions – costing a lot of people a lot of time and money,” the press release said.

The FTC filed a court complaint against the company in which the authority estimates that approximately 2.9 million users in the US purchased at least one of Care’s auto-

renewing memberships between January 2019 and March 2022.

Care advertised grossly inflated numbers of jobs and earnings. During the same period, approximately 4.7 million job postings (56% of all jobs posted on the platform) on Care.com were created by seekers who never upgraded their plan to Premium, meaning those jobs were nonexistent.

One 2021 Care ad campaign claimed “Childcare jobs from $18/hr,” while its own website stated that “On average, the national pay rate for babysitting jobs” and “the average rate for babysitters on Care.com” were between $13 and $14.25 per hour.

FTC found that Care has not actually tracked earnings for jobs found on its platform and has little to no credible information to back up its earning claims.

The families and caregivers using Care.com services were manipulated by unlawful tactics, called “dark patterns,” to prevent them from canceling their subscriptions.

“When consumers try to cancel Care subscriptions, they must click through a number of unrelated links to find information about how to cancel,” FTC said. “Consumers regularly complained about difficulties in finding the cancellation options, with many resorting to searching online for instructions on how to cancel.”

Multiple steps were designed to impede users from successfully canceling, such as multi-page questionnaires, confusing language, warnings about the effects of cancellation, and offers to buy other paid memberships before finally being able to successfully cancel.

Also, paid subscriptions were much harder to cancel than free subscriptions, which required only two relatively simple steps.

“The company made you navigate its cancellation maze and, even if you think you successfully canceled, you might still get billed the next month. Reaching customer service was difficult – and if you did, you still might not get a full refund,” the FTC says.

For care seekers, the Premium membership could be bought as a monthly, quarterly, or yearly subscription for $39.99, $75.99, and $155, respectively.

Care providers were required to sign up for one or more auto-renewing memberships, which varied in price from approximately $8.99 per month to $19.99 per year, according to a complaint.

Reached a settlement

According to the statement, Care has agreed to the FTC’s proposed settlement, which will require it to turn over $8.5 million. The money will be used to refund consumers harmed by unlawful practices.

Going forward, the company will be required to back up its claims about the potential earnings and jobs available on the site. Only jobs posted by users who can actually hire potential workers will be posted.

“I’ve been extremely concerned about the over-promises the gig economy makes to workers,” Commissioner Rebecca Kelly Slaughter said.

“The alleged conduct by Care in this matter reinforces that multifaceted concern. Deceptive earnings claims and illusory job leads not only rob people of their time and money but also can distort job markets by artificially depressing wages, keeping people out of work longer, and undoubtedly pushing some into more desperate precarity.”

The FTC shared some tips for caregivers looking for jobs.

“You don’t have to pay to find a job. Consider using free websites with job listings. Or, sign up with an agency or company that can place you with people who need caregivers,” it said.

The authority also recommends talking to other gig workers before taking gig work to learn about their experiences, realistic hourly wages, and payments.

“If you sign up for a subscription like Care.com, you’ll be charged until you cancel. To cancel, start by contacting the company and follow their instructions. If a company doesn’t deliver on its promises or you’re having trouble canceling a subscription, report it to the FTC at ReportFraud.ftc.gov.”