Care.com settles with FTC for $8.5 million over job postings and contract extensions

Care.com, a platform for providing in-home care services for children, seniors and pets, has agreed to pay $8.5 million to settle allegations by the U.S. Federal Trade Commission (FTC) that the company greatly inflated the number of available positions and made it difficult to cancel memberships.

The settlement with the IAC Inc. subsidiary was filed Monday in federal court in Austin, Texas, and is subject to judge approval.

The case followed tens of thousands of complaints from Care.com customers, including many who thought they had canceled their memberships but then received a bill again. The $8.5 million will be used for refunds. Care.com did not admit or deny wrongdoing in the settlement.

According to the FTC, Care.com tricked customers into purchasing auto-renewing memberships by exaggerating the number of jobs, or “gigs,” on its platform and the earnings they could earn.

It states that Care.com knew or should have known that a significant number of the positions were unlikely to result in employment.

According to the FTC, Care.com “frustrates” customers who want to cancel through misleading website design, including a “Submit” button that makes customers think they have canceled and a “Cancel” button that actually cancels the cancellation process.

Approximately 2.9 million U.S. consumers purchased an auto-renewable Care.com membership between January 2019 and March 2022.

The settlement requires the Austin-based company to provide a “simple mechanism” to avoid unwanted contract extensions and to document employment claims on its website.

“Care.com has used inflated job numbers and unsubstantiated earnings claims to lure caregivers to its platform and has used deceptive design practices to lure consumers into subscriptions,” said Samuel Levine, FTC's consumer protection director. “The order announced today puts an end to these unlawful practices.”

Care.com said in a statement that the company will focus on helping families and caregivers.

It added that, given the rising costs of child care and health care, “it is disappointing that the FTC has chosen to attack trusted companies that are part of the solution.” (Reporting by Jonathan Stempel in New York; editing by Richard Chang)