FTC alleges company misrepresented the quality, source of leads

Federal Issues FTC Enforcement Lead Generation

On March 11, the FTC issued an administrative complaint against a Colorado-based digital marketplace company (defendant) alleging it used deceptive and misleading practices in selling home improvement project leads to service providers. The complaint alleges that since 2014 the defendant has made false, misleading, or unsubstantiated claims regarding the quality and source of the leads it sells to service providers, such as general contractors and small lawn care businesses. The complaint alleges, among other things, that the defendant told service providers that its leads resulted in actual home improvement jobs at rates higher than its own data supported, and that the defendant misled service providers about the cost of an optional one-month subscription to a software platform that it sold with its leads and the cost of the optional one-month help desk subscription. The defendant’s actions allegedly resulted in service providers, many of whom operate in the gig economy, spending time following leads below the promised quality and seeking refunds for those leads. The FTC’s Director of Bureau of Consumer Protection stated, “Today’s administrative complaint against [the defendant] shows that the FTC will use every tool in its toolbox to combat dishonest commercial practices.”