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Care.com is paying out $8.5 million in refunds after settling with the Federal Trade Commission over misleading job postings and failed subscription cancellations.
The website, which connects people with babysitters, senior care workers, or housesitters, used "inflated job numbers and baseless earnings claims" to deceive both customers and workers, the FTC said in a statement.
"The order announced today puts a stop to these unlawful practices, returns millions of dollars to consumers, and helps ensure an honest marketplace for families looking for care and caregivers looking for work," FTC Bureau of Consumer Protection Director Samuel Levine said.
Care.com has helped some 29 million families in the United States find babysitters since its creation in 2006, according to Forbes.
To communicate with a caregiver on Care, both job posters and job seekers must create an account on the website with an auto-renewed subscription, according to the release. The FTC says that Care "vastly overstated" the number of available jobs on the site and made "unsubstantiated claims" about how much money users could make by accepting those jobs.
The website boasted hourly and weekly earnings that were "designed to entice consumers into paying for subscriptions" even though it had "little to no data" supporting the claim that workers were making that much money, according to the FTC.
In one 2021 ad campaign, the company advertised jobs starting "from $18/hr," while simultaneously stating on its website that the average national pay rate for babysitters— and on Care — was between $13 and $14.25 an hour, the FTC complaint said.
In a separate statement, Care said that the FTC settlement is "in no way a validation of the FTC's claims" and that it won't change how the company operates.
Care said in the statement that the renewing subscriptions users have to buy are actually an annual "screening fee."
"We would not be in business for long if we manipulated optics, inflated statistics and attempted to trick our customers," Care said. "We have found that many care seekers prefer to see a level of interest in their job post before committing to a premium membership, and our basic service tier offers this 'try before you buy' opportunity."
The company added that it does not set or make promises about earnings rates and that it has streamlined its process for account cancellations.
