With its reputation heavily at stake, the Federal Trade Commission announced in January 2020 that the online marketplace for child care, elder care, and other home services, Care.com, has agreed to pay $1 million to settle charges of misconduct. Care.com, which is considered the leading platform for connecting families with caregivers, was accused of making misleading claims to consumers regarding the scope of its background checks and capabilities to accurately match consumers with the right caregivers.
On the surface, the allegation suggested that Care.com publicly inflated their job listings to attract increased registrations. Unaware that numerous posts were old or seemingly baseless, caregivers paid membership fees to gain access to these opportunities. This inevitably led to a significant mistrust within the caregiver community who reportedly felt deceived by the company’s actions.
One prevalent accusation was that Care.com failed to properly vet caregivers and misrepresented the completeness of its background checks. In some instances, caregivers who had police records were not flagged by the site’s supposedly robust background check system. Consequently, this has allegedly resulted in hiring individuals who were unfit for caregiving roles— posing major safety and security risks to those in the Care.com community.
The second part of the allegation focused on the website’s billing practices. The FTC claimed that Care.com enrolled consumers in recurring membership plans without their explicit consent. The company allegedly made it difficult to cancel memberships or dodge recurring payments – sometimes automatically renewing them without clearly communicating these stipulations during sign-up. Essentially, consumers tussled with a subscription model they neither agreed to nor had any express knowledge of, resulting in unwarranted financial obligations.
Amid these allegations, the website reached an agreement with the Federal Trade Commission to settle the charges for $1 million. This resolution, however—at least for some seemed paltry considering the potential financial and emotional damage inflicted by the company’s practices. The settlement includes provisions aimed at remedying the complaints. Moving forward, Care.com is required to provide clear and conspicuous disclosure about its background-check procedures to consumers, and obtain express informed consent from members before enrolling them in any recurring billing plan.
As part of the settlement, Care.com must regularly report to the FTC its progress in meeting these obligations. These requirements are meant to protect the interests of consumers and caregivers, restoring some of the lost trust and integrity of the marketplace platform.
While the controversy has left a smear on the reputation of Care.com, it has also spurred the company and similar platforms to rethink their methods, stepping up transparency, and constructing
