The FTC Secures Settlement for Deceptive Practices with Attorney General Letitia James
(WNY News Now)NEW YORKFollowing an inquiry that uncovered misleading advertising tactics, workers who were misled by Handy Technologies, a division of Angi Inc., are scheduled to earn $2.95 million. The Federal Trade Commission (FTC) and the New York Attorney General’s Office (OAG) discovered that Handy misrepresented payment schedules and exaggerated hourly wages in ads to recruit workers for household service positions.
According to the research, Handy’s advertisements often inflated hourly wages, with some employees making almost 50% less than what was reported. Workers usually had to wait up to seven days for payment unless they paid a fee, so claims of daily pay were also deceptive. Additionally, Handy required a multi-step procedure to avoid penalties and imposed concealed fees on employees for customer-related difficulties.
Attorney General James stated that workers in New York should receive their guaranteed wages on time. Although apps like Handy’s give New Yorkers flexible work options, they shouldn’t be permitted to entice employees with false promises and lies. Along with our FTC colleagues, we are holding Handy responsible and forcing the corporation to reimburse thousands of workers who were defrauded of $2.95 million. Without hesitation, my office will take action against businesses who defraud hardworking New Yorkers.
Handy Technologies enticed workers onto its platform with exaggerated and fraudulent earnings claims. According to Samuel Levine, Director of the FTC’s Bureau of Consumer Protection, it then withheld fines and costs from their pay that were not properly disclosed. The injunction released today guarantees an honest marketplace for American workers and stops these illegal tactics.
Workers, known as Pros, can apply for domestic service jobs like house cleaning, handyman services, furniture assembly, and lawn care using Handy’s web platform. Handy has placed tens of thousands of ads promoting the salaries that workers receive throughout the state, including in New York City, Westchester, the Hudson Valley, and the Finger Lakes, in an effort to lure people onto its platform.
But Handy’s claimed profits were often misleading, unsupported, or untrue. For instance, Handy advertised in almost 100 places in 2021 that Lawn Care Professionals could make up to $53/hour. However, with a median rate of pay of less than $27 per hour, barely 10 percent or less of Pros in almost all of these regions made the claimed rate. Handy placed ads in the Hudson Valley in September 2022 asserting that lawn care professionals make at least $28 per hour. Only about 25% of Lawn Care Pros in the area made the advertised rate, though, based on Handy’s own data.
Additionally, Handy’s marketing made false claims regarding the speed at which workers would receive payment. Handy claimed that professionals would receive daily pay or may cash out as soon as the project was completed in hundreds of job advertisements and postings. But after finishing a work, Pros were usually paid within seven days. The $1.99 cost that Pros have to pay Handy in order to get paid before the seven-day default was not mentioned in Handy’s advertisements. Furthermore, only Pros who were tenured—that is, who had previously received $50 for a Handy work completed—were eligible for daily payments.
Furthermore, Handy neglected to explain the intricate, multi-step procedure that employees had to adhere to in order to avoid being fined when a client refused to grant access to a task site or gave a worker instructions not to show up. These circumstances—known as Customer No Shows, or CNSs—occurred for no fault of the professional. However, Handy labels them as a Pro No Show, or PNS, because the task looks incomplete, and the Pro is fined, usually $50. In order to avoid the penalty, Handy mandated that Pros give the Handy app permission to access their phone’s GPS location, check in via the app when they arrive at the job site, try to contact the customer in a way that Handy can track via the Pro’s phone, and wait at the job site for 30 minutes while still attempting to contact the customer. According to the OAG and FTC, Handy did not fully disclose that in order for Pros to avoid charges, they needed adhere to this intrusive, multi-step procedure. It was too late for many Pros to discover the protocol until they were contesting the fine.
According to the deal, Handy must pay $2,950,000 to thousands of workers and ensure that its hourly rates, fines and fees, and payment schedules are appropriate. Workers who qualify will be informed of their payout amount.
Under the direction of Bureau Chief Kim Berger, Senior Enforcement Counsel Jordan Adler and Deputy Bureau Chief Clark Russell of the Bureau of Internet and Technology handled this case. First Deputy Attorney General Jennifer Levy is in charge of the Division for Economic Justice, which includes the Bureau of Internet and Technology. Chief Deputy Attorney General Chris D. Angelo leads this division.
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