HOMEADVISOR CLASS ACTION

In re HomeAdvisor, Inc. Litig., Case No: 1:16-cv-01849-PAB-KLM (D. Colo.)

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.

The Federal Trade Commission (“FTC”) issued an administrative complaint against HomeAdvisor, Inc. (which is doing business as Angi Leads and HomeAdvisor Powered by Angi), on March 11, 2022, alleging that since at least 2014 HA has employed false and deceptive practices that caused service professionals (usually small businesses that perform home improvement projects) to become HA members and to purchase “leads” that are contrary to the quality, characteristics, and sources conveyed by HA in connection with its advertising, marketing, promotion, offering for sale, and sale of “leads”.  Issuance of an administrative complaint marks an important development as the FTC issues an administrative complaint when it has “reason to believe” that the law has been or is being violated, and a proceeding is “in the public interest.”

            The FTC’s heavily redacted administrative complaint, which mirrors claims being pursued by CSKD against HA and other defendants in In re HomeAdvisor, Inc. Litigation, first alleges that in connection with its advertising, marketing, promotion, offering for sale, and sale of “leads”, HA misrepresents “directly or indirectly, expressly or by implication”, that the leads “concern”: “individuals who intend to hire a service provider soon”, “projects that match the types of services” and “geographic areas” that “service providers have expressed they” perform or serve, and “individuals who knowingly sought HomeAdvisor for assistance in selecting a service provider.”  As the FTC administrative complaint alleges, “[i]n truth and in fact” those representations about the quality, characteristics and sources of the leads were “false or misleading”. The FTC complaint goes on to allege that HA made unsubstantiated representations about the rates that leads convert into jobs. Finally, the FTC complaint alleges that until at least 2016, HA misrepresented that the cost of an annual membership included one free month of mHelpDesk  (“an optional, add-on product that automatically renews after the first month”), when “[i]n truth and in fact” “the first month of mHelpDesk is not free.”

            The FTC has scheduled a hearing on the claims set forth in the administrative complaint for November 9, 2022. A publicly available version of the redacted administrative complaint can be found at the following link:

https://www.ftc.gov/system/files/ftc_gov/pdf/D9407HomeAdvisorComplaintProvisionallyRedacted.pdf.  Updates on the administrative proceeding can be found at the following link:   https://www.ftc.gov/legal-library/browse/cases-proceedings/1923106-homeadvisor-matter

            In the meantime, the class action being litigated by CSKDS has concluded the discovery stage and class certification motion briefing is underway.

If you or someone you know purchased Leads from HomeAdvisor and have experienced any of the problems described above or in the Complaint linked below, please complete the form or contact the attorneys for this case.

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Attorneys for this case:

Nicholas E. Chimicles
Kimberly Donaldson-Smith
Scott M. Tucker
Stephanie E. Saunders