Care.com settles FTC case for $8 million

(CN) — The Federal Trade Commission announced on Tuesday that it would distribute more than $8 million in refunds to consumers as part of a settlement agreement with the caregiver gig platform Care.com.

Care.com is an online marketplace that connects families with individuals seeking to provide caregiving services, such as child care and senior care. The FTC sued Care.com last year in the U.S. District Court for the Western District of Texas, accusing the platform of misleading job seekers by engaging in deceptive advertising regarding the number of jobs available on its site and the amount of money caregivers could expect to earn from such jobs.

The agency also accused Care.com of making it deliberately difficult for users to cancel their subscriptions.

Care.com, an online marketplace for child and senior care, was sued by the FTC last year in the U.S. District Court for the Western District of Texas for allegedly misleading job seekers about available jobs and expected pay. The agency also accused the platform of making it intentionally difficult to cancel subscriptions.

“When [care] seekers and providers attempt to cancel their auto-renewing memberships, Care frustrates their ability to do so,” lawyers for the FTC wrote in the complaint. “Many are unable to determine how to begin the cancellation process to stop recurring charges. Consumers who manage to locate the inconspicuous cancellation flow must then navigate a multipage process rife with deceptive design tactics, known as dark patterns, that limit the number of people who successfully cancel.”

The FTC said “tens of thousands” of users complained that Care.com’s cancellation process didn’t work, with some being billed after canceling their subscription.

Care.com settled for $8.5 million, agreeing to compensate consumers, stop making misleading claims about jobs and pay, and offer a simple cancellation option.

On Tuesday, the FTC announced it is sending payments to 194,207 affected users, advising check recipients to cash them within 90 days and PayPal users to redeem funds within 30 days.

Care.com said in a statement that the settlement agreement “is in no way a validation of the FTC’s claims.”

“At a time when the care economy is under assault, when families are draining their savings to afford child care, when caregivers are leaving the profession and when our growing senior population is facing astronomical long term care costs, it is disappointing that the FTC has chosen to attack trusted businesses who are part of the solution,” a company spokesperson said.

The case against Care.com was part of a larger push by the Biden administration targeting so-called “junk fees.” The FTC finalized a “click-to-cancel” rule last year requiring businesses to make it easy for consumers to cancel their subscriptions. The agency is set to begin enforcement of the rule on July 14.