Business ProfileforHomeAdvisor

The following describes a government action that has been resolved by either a settlement or a decision by a court or administrative agency. If the matter is being appealed, it will be noted below.

On January 23, 2023, the United States of America before the Federal Trade Commission and HomeAdvisor, Inc., a corporation, d/b/a Angi Leads, d/b/a HomeAdvisor Powered by Angi entered into an Agreement Containing Consent Order requiring HomeAdvisor to pay up to $7.2 million for using a wide range of deceptive and misleading tactics in selling home improvement project leads to service providers, including small businesses operating in the “gig” economy.

The administrative order also bars HomeAdvisor from the deceptive conduct detailed in the Commission’s complaint against the company, which the complaint alleged occurred over many years, and sets up two redress funds to provide money to defrauded service providers. The administrative order will be subject to public comment after which the Commission will decide whether to make the order final.
HomeAdvisor, which also does business as Angi Leads and HomeAdvisor Powered by Angi, recruits service providers, such as general contractors and lawn care businesses, to join the company’s network. Once service providers join the network, HomeAdvisor sells them leads, which the service providers use to contact potential customers for home repair and maintenance projects.

Service providers who join HomeAdvisor’s network generally pay an annual membership fee of $287.99, in addition to a separate fee for each lead they receive. As part of their HomeAdvisor membership package, many service providers have also paid an additional $59.99 for an optional one-month subscription to a service called mHelpDesk, which includes software that helps with scheduling appointments and processing payments.

The FTC’s March 2022 administrative complaint against HomeAdvisor charged that since at least mid-2014 it has made false, misleading, or unsubstantiated claims about the quality and source of the leads the company sells to service providers who are in search of potential customers. For example, the complaint alleged that, while HomeAdvisor has represented that service providers only will receive leads matching the types of services they provide and their preferred geographic area, many of them do not.

The complaint also alleged that HomeAdvisor often tells service providers that its leads result in jobs at rates much higher than it can substantiate. Finally, the complaint alleged that HomeAdvisor’s sales agents misrepresented that the optional one-month mHelpDesk subscription was free.

In addition to requiring that HomeAdvisor pay up to $7.2 million for redress, the proposed order prohibits the company from making any false or misleading claims regarding its leads, including that they concern individuals who are ready to hire a service provider or who submitted a request for home services directly to HomeAdvisor. It also bars HomeAdvisor from misrepresenting its products as free when they are not, or making unsubstantiated claims about the rate at which its leads convert into paying jobs.

The redress program included in the order would administer two separate funds. The first would make payments of up to $30 to service providers affected by HomeAdvisor’s misrepresentations about its lead quality. The second would make payments of up to $59.99 to service providers who were told that the first month of their mHelpDesk subscription was free.

The Commission vote to accept the proposed consent agreement was 4-0. The FTC will publish a description of the consent agreement package in the Federal Register soon. The agreement will be subject to public comment for 30 days, after which the Commission will decide whether to make the proposed consent order final. Instructions for filing comments will appear in the published notice. Comments must be received 30 days after publication in the Federal Register. Once processed, comments will be posted on Regulations.gov.

For more information, please contact the Federal Trade Commission at www.ftc.gov or (202) 326-2222.

The following describes a pending government action that has been formally brought by a government agency but has not yet been resolved.  We are providing a summary of the government’s allegations, which have not yet been proven. 

On March 14, 2018, the San Francisco District Attorney has entered a complaint for permanent injunction, civil penalties, restitution, and other equitable relief against HomeAdvisor Inc. et al.  The complaint alleges that HomeAdvisor used radio and television ads that misled consumers into thinking service personnel hired through the platform have all passed criminal background checks. The district attorney is seeking a permanent injunction that would require the defendants to stop making false and misleading statements, as well as civil penalties and restitution. A preliminary injunction date is set for April 12, 2018.  This matter is pending.

On May 30, 2018, The San Francisco Superior Court granted a preliminary injunction requiring Homeadvisor to stop airing misleading advertisements that allegedly imply that all personnel entering a consumer's home have passed a background check.  https://sfdistrictattorney.org/sites/default/files/Document/2018-05-24%20Preliminary%20Injunction.pdf

In response to these charges, the business provided the following statement:

"HomeAdvisor feels it is important to provide some context and a short response about this matter, which only relates to the State of California.  First and foremost, the action does not allege any problem with HomeAdvisor’s background check program (described here https://www.homeadvisor.com/screening/ ), that HomeAdvisor failed to conduct appropriate background checks, or that anyone was actually harmed by someone who was not background checked.  Instead, it alleges that California consumers may have been confused by some of our television or radio advertising about the scope of the background check program, even though the San Francisco District Attorney has failed to identify a single California consumer who was misled after more than a year of investigation.  Further, we note that a California court already denied the San Francisco DA’s initial request for an injunction based on the same allegations, and we are confident that the court will rule the same way on April 12.  We are proud of the service that HomeAdvisor provides and stand behind our advertising."