Care.com Makes Headlines: Job Listings Inflation and Mandatory Membership Renewals Resolved!

In a recent turn of events, Care.com found itself embroiled in legal dispute over alleged deception in its service offerings. The popular platform geared toward helping families find care providers for children, seniors, pets, and houses, faced two main allegations; artificially inflating its job listings and enforcing automatic membership renewals without proper consent. The charges were brought up by Federal Trade Commission (FTC) who alleged that Care.com duped potential job seekers with an inflated database of job listings. It was found that a significant number of jobs were non-existent or already filled, giving a false impression of the availability of positions. By presenting inaccurate information on available jobs, the FTC voiced that the company violated Section 5 of the FTC Act which prohibits ‘unfair or deceptive acts or practices in or affecting commerce.’ The FTC’s investigation revealed that Care.com had been re-posting old job listings to give an illusion of a robust, ever-flourishing job market. This practice not only misleads prospective caregivers who are on the hunt for jobs, but it also damages the trust between the users and the company, potentially deterring them from availing the platform’s services. Alongside inflated job listings, Care.com was hit with another charge of enforcing automatic membership renewals without clear and conspicuous disclosure. The FTC depicted this practice as an explicit violation of the Restore Online Shoppers’ Confidence Act (ROSCA) that mandates clear disclosure of all material terms before obtaining consumers’ billing information for online transactions. While the company did mention automatic renewals in their terms of service, the FTC posited that this was insufficiently prominent and thus, deceptive. Under the ROSCA, not only is the company required to disclose the terms of the renewal, but they also need to obtain ‘express informed consent’ for these renewals from the users. As per the FTC complaint, Care.com fell short on both accounts, thereby putting their users at a disadvantage. In the wake of these allegations, Care.com has reached a settlement with FTC. As part of the settlement, Care.com is obliged to pay a hefty $1 million penalty and is also mandated to make notable changes in its business practices. Notably, the company is now required to provide a clear, timely, and conspicuous disclosure of any automatic membership renewals, along with obtaining the consumers’ informed consent for the same. Furthermore, they are expected to cease from misrepresentations related to job postings and background checks. Moreover, to comply with set mandates and settle