Class Action Filed Against HomeAdvisor & IAC/Interactive
In re HOMEADVISOR, INC. LITIGATION, Case No: 1:16-cv-01849-PAB-KLM (D. Colo.)
On July 19, 2016, Chimicles Schwartz Kriner & Donaldson-Smith LLP (CSK&D) filed a class action lawsuit on behalf of Home Service Professionals against Defendants IAC/Interactive (“IAC”), a media and Internet conglomerate, and its operating business, HomeAdvisor (“HomeAdvisor”) (formerly ServiceMagic), for deceptive, coercive and unfair business practices related to HomeAdvisor’s lead generation services and purported benefits of Membership Programs. HomeAdvisor is a nationwide home services digital marketplace that claims to help connect homeowners with Home Service Professionals in the HomeAdvisor network. While the service is free to homeowners, Home Service Professionals are required to purchase an annual membership in order to join the HomeAdvisor network, plus pay an additional fee for each lead.
Defendants market HomeAdvisor’s lead generation services as providing Home Service Professionals with qualified business opportunities; however, in the First Amended Complaint that was filed on November 14, 2016, CSK&D alleges on behalf of Plaintiffs and a class of Home Service Professionals that Defendants acquire, generate and charge Home Service Professionals for leads that are not from targeted, serious, qualified and/or project-ready homeowners. As a result, Home Service Professionals paid an annual Membership Program fee, and hundreds and thousands of dollars for leads comprised of: wrong or disconnected phone numbers and contact information; persons who never even heard of HomeAdvisor; stale leads; contacts for homes that were listed for sale; and contacts for vacant or non-existent residences.
Defendants’ deceptive and fraudulent practices do not end with the sale of bogus leads. In addition to maintaining and employing systemically flawed and deficient processes to generate leads, the complaint alleges that Defendants have adopted fundamentally unfair business practices in dealing with Plaintiff and the class of Home Service Professionals including, but not limited to, the following: (1) using heavy-handed and coercive means to solicit new members for Membership Programs; (2) concealing and omitting material information about substantial fees; (3) blatantly disregarding Home Service Professionals’ lead parameters and budgets; (4) distributing the same lead to more than four Home Service Professionals; and (5) adopting uniform internal procedures intended to deny and discourage refunds and/or lead credits.
On May 18, 2018, Plaintiffs filed a Proposed Second Amended Complaint under Level 1 Restriction. While access to the Proposed Second Amended Complaint is currently limited to the parties and the court, the appendices, which are described and linked below, are publicly available.
- Appendix I which contains the first-hand accounts of over 760 Home Service Professionals who have contacted Plaintiffs’ Counsel concerning Defendants’ conduct.
- Appendix II which is a compilation from HomeAdvisor’s current and former employees who have posted on the job site Glassdoor.com.
If you or someone you know purchased a Membership Program from HomeAdvisor and have experienced any of the problems described above or in the complaint linked below, please complete the form below or contact the attorneys for this case.