Home improvement companies from eight states have filed suit against HomeAdvisor, alleging the digital marketplace misrepresented its services, provided illusory leads, and engaged in deceptive and fraudulent sales practices with home service provider members.
The plaintiffs seek class-action status for the lawsuit, which was filed July 16 in U.S. District Court in Denver. All eight plaintiffs joined HomeAdvisor between August 2014 and August 2017. During that time, HomeAdvisor added nearly 100,000 paying home service providers and grew its total number of providers to 181,000.
In their suit, the plaintiffs are requesting compensation for actual and punifit damages and an injunction to prohibit HomeAdvisor from continuing its alleged wrongful conduct.
In response, a HomeAdvisor spokeperson told REMODELING: “We don’t comment specifically on pending litigation. We strive to create a positive, successful environment for our customers, service professionals, and employees. We take all concerns seriously, and take action as appropriate.”
The Pennsylvania-based attorneys representing the eight plaintiffs, Chimcles & Tikellis, specialize in class action lawsuits. In 2016, Chimcles & Tikellis filed a lawsuit on behalf of three home service professionals against IAC and HomeAdvisor. The previous lawsuit also targeted HomeAdvisor’s lead generation and the case is still ongoing.
Attorneys for the remodelers named in the suit say the plaintiffs’ allegations were corroborated by more 880 current and former HomeAdvisor members. The initial court filing also includes accounts from seven former HomeAdvisor employees who, the filing says, allege the fraudulent nature of the company’s business model and suggest illegal activity took place at the company’s Colorado headquarters.
HomeAdvisor is a digital marketplace that advertises connecting homeowners with local service professionals. The company is a subsidiary of internet and media company InterActiveCorp. In 2017, HomeAdvisor merged with Angie’s List to form ANGI Homeservices, the world’s largest digital marketplace for home services.
HomeAdvisor advertises “ready-to-hire” homemakers, “qualified leads,” and “highly targeted prospects” for its members, the suit says. The plaintiffs allege most of the leads they were charged for by HomeAdvisor were “bogus.” The plaintiffs claim to have been charged for leads with disconnected phone numbers, incorrect contact information, involved people who were not homeowners or never requested services through HomeAdvisor, were stale leads from previously completed projects, or were contacts for vacant or non-existent residences.
One plaintiff alleges receiving 28 leads in a month and had only two progress to jobs.
The lawsuit also alleges that members are not informed in advance how much they will pay for each customer lead; the fee ranges between $10 and $140. The court filing claims the majority of HomeAdvisor leads are generated through third-party affiliates and not by HomeAdvisor itself. The lawsuit also asserts that members are unable to turn off leads to avoid lead payments and that HomeAdvisor leaves canceled members’ profiles on their website, redirecting stale leads to current members.