Advertising Law Blog

Highlighting the increasing regulatory focus on paid subscription cancellation, the Federal Trade Commission has taken action against Care.com, alleging that the company systematically deceived users as to the wages and jobs information they could access on Care.com, and failed to provide a simple method for users to cancel their paid memberships. As part of its settlement, Care has agreed to pay $8.5 million to the FTC.

Care.com (“Care”) operates an online platform and App that connect people seeking carer work, including caring for children, seniors, individuals with special needs, and pets, with individuals who have such positions open. The Federal Trade Commission (“FTC”) in its  complaint, filed in the United States District Court for the Western District of Texas, alleges that, in order convince users to purchase paid memberships, Care advertises certain hourly and weekly rates that job seekers can achieve through the platform, as well as the number of job opportunities available to users on its platform. According to the FTC, these claims, characterized as earnings claims, are not based on actual wages earned by providers, and the number of available jobs is based on potential job posters who are not even eligible to have their jobs be posted on the website.

In addition to the inaccurate and unsupported earnings claims, the FTC takes issue with Care’s subscription cancellation pathway. The FTC alleges that when users attempt to cancel their paid memberships, “Care frustrates their ability to do so” and fails to provide a simple mechanism for subscription cancellation. In particular, the FTC states that users wishing to cancel their subscriptions must first locate the “inconspicuous cancellation flow” and then “navigate a multipage process rife with deceptive design tactics.” According to the FTC, Care is aware of the difficulties users experience in its cancellation process and deliberately employs “dark patterns” to hinder the ability of users to cancel their subscriptions. In fact, the FTC points out that Care itself has even flagged at least one aspect of its cancellation flow as “Dark UX Pattern.”

In addition to the sizeable monetary relief, the settlement stipulates that Care is prohibited from marketing any earnings claims unless the representation is non-misleading and supported by competent and reliable evidence. Moreover, Care must provide a simple method of subscription cancellation. Specifically, the cancellation mechanism must be easy to find, at least as easy to maneuver as the enrollment process, and be provided through the same medium as the consumer used to sign up for the subscription.

Takeaway: The FTC continues to be motivated to take action against marketers it believes are employing deceptive marketing practices, including dark patterns and those related to subscription cancellation processes. Marketers should take note of the practices that the FTC continues to pursue, including those described in the Care complaint, and take steps to ensure compliance with regulatory guidance.