In 2016, Chimicles Schwartz Kriner & Donaldson-Smith LLP (CSK&D) initiated a class action lawsuit, on behalf of a proposed class of HomeAdvisor Home Service Professionals, against HomeAdvisor, Inc., IAC/InteractiveCorp, ANGI Homeservices Inc. (NASDAQ: ANGI), C. David Venture Management, LLC (d/b/a HomeBlue), Venture Street, LLC and CraftJack, Inc. for deceptive, coercive and unfair business practices related to HomeAdvisor’s lead generation services and membership programs. The Action alleges that Defendants violated federal and/or state laws with their fundamentally unfair and fraudulent business practices which include:
- maintaining and employing systemically flawed and deficient processes to generate leads;
- charging Home Service Professionals for leads that were not from project-ready homeowners, were not verified and were bogus;
- using heavy-handed and coercive means to solicit new Home Service Professionals for Membership Programs;
- concealing and omitting material information about substantial monthly fees for mHelpDesk;
- blatantly disregarding Home Service Professionals’ lead parameters and budgets;
- distributing the same lead to more than four Home Service Professionals;
- adopting uniform internal procedures intended to deny and discourage refunds and/or lead credits; and,
- exploiting terminated Home Service Professionals by maintaining their online profiles in order to shamelessly generate and pilfer Leads for its current network of HSPs.
A copy of the Complaint and first-hand accounts from over 1,330 Home Service Professionals (see Appendix I) and current and former HomeAdvisor employees (see Appendix II) can be accessed below.
The Court has held that HomeAdvisor “failed to meet its burden to present ‘evidence sufficient to demonstrate the existence of an enforceable agreement’”. Chief United States District Judge Philip A. Brimmer, in a September 17, 2019 Order, rejected HomeAdvisor’s attempt to force the plaintiffs out of court and into arbitration. The Order can be accessed below. In the Order, the Court made the following significant statements about HomeAdvisor’s sign-up process and the unenforceability of its “Terms and Conditions” (“T&Cs”).
- An HSP would “not understand or focus on [T&Cs] that were never explained or stated…A response to the telephone prompt cannot be considered an unambiguous assent to reasonably conspicuous contractual terms and cannot be said to give the plaintiffs ‘reasonable notice, either actual or constructive, of the terms of the putative agreement.’” Order, page 7.
- HSPs “enroll[ed] with HomeAdvisor with no knowledge that an arbitration clause existed and with no meaningful opportunity to review any of HomeAdvisor’s [T&Cs].” Order, page 11.
- “[C]ontinued use of the product [by the HSPs] did not constitute assent to the [T&Cs].” Order, page 13.
- HomeAdvisor “has failed to meet its burden to present ‘evidence sufficient to demonstrate the existence of an enforceable agreement…’” Order, page 13.
It has come to our attention from current and former Home Service Professionals that they are being told that the T&Cs constitute a binding contract. The Court’s Order held that, based on the manner in which the plaintiffs became HomeAdvisor members, the plaintiffs did not assent to the T&Cs and HomeAdvisor did not demonstrate the existence of an enforceable agreement with them. HomeAdvisor did not appeal the Order. The Order is a public document. The Order and the Court’s statements about the T&C’s can be shared with anyone, including by Home Service Professionals with their representatives and lawyers and those dealing with collection agencies.