Company Raimondo Pushed During COVID Cited by Feds, Paying $8.5M

Company Raimondo Pushed During COVID Cited by Feds, Paying $8.5M

During COVID, former Rhode Island Governor Gina Raimondo closed Rhode Island’s daycare centers and repeatedly promoted a privately owned out-of-state company that had powerful investors and a track record of alleged violations.

On Tuesday, the Federal Trade Commission (FTC) announced that it is sending refunds totaling more than $8.1 million to consumers who are harmed by online child and older adult care gig platforms, Care.com (Care). The company will pay $400,000 to the FTC. The total amount paid is $8.5 million.

The FTC alleged that Care used deceptive advertising that vastly overstated the number of jobs available on its platform and made unsubstantiated claims about how much job seekers could expect to earn through these jobs. The complaint also alleged that Care used unlawful tactics to prevent consumers — both job posters and job seekers — from canceling their subscriptions.

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But in 2020, despite enforcement actions being taken against the company in other states Raimondo repeatedly pushed for Rhode Islanders to sign up for Care.com’s services.

 

Raimondo Closed RI Childcare Providers and Pushed Care.com - On Same Day

Raimondo pushed Care.com daily to Rhode Islanders and urged them to sign up.  In her administration’s daily press briefings, Care.com was a key message point.

In more than a dozen press conferences and press briefing materials, Raimondo pushed Care.com even after GoLocal raised questions about the company being cited for violations and being investigated in other states.

While closing Rhode Island childcare facilities, Raimondo was endlessly pushing Care.com and its “extensive background and safety checks”

 

 

“Effective tomorrow [March 28, 2020], the state is suspending all childcare licenses until April 4. Rhode Island has partnered with Care.com to increase childcare access to Rhode Islanders. In addition to providing 90 days of free, premium access to their website, Care.com has created portals specifically for frontline workers and caregivers in Rhode Island. Starting today, frontline workers looking for child care can visit www.care.com/rineed to find a local caregiver. Rhode Island residents interested in becoming caregivers can visit www.care.com/rigive  to register. Potential caregivers are subject to Care.com’s extensive background and safety checks. While child care services are not typically free of charge, the Rhode Island portal gives residents the ability to waive their fees and volunteer as caregivers, providing additional support to frontline workers,” wrote the Governor's office during COVID.

Raimondo’s promotion of Care.com came under fire at the time. One of the critics in 2020 was Nicholas Oliver, Executive Director for the Rhode Island Partnership for Home Care, over safety concerns.

"The Rhode Island Partnership for Home Care, representing home care providers licensed by the Rhode Island Department of Health, has concerns over the announcement made earlier today by Governor Gina Raimondo regarding her relationship with ‘Care.com’ to provide access to child and elder care 'volunteers' and 'recently unemployed individuals' looking for side work," said Oliver at the time. 

 

Who Were the Powerful Tied to Care.com?

Care.com was purchased in December 2019 for $500 million by IAC — which is chaired by media giant and former Fox executive Barry Diller and the company's board includes Chelsea Clinton and Michael Eisner.

Diller's wife, designer Diane Von Furstenberg, donated $1,000 to Raimondo's campaign fund in 2018. She is the mother of IAC board member and Brown graduate Andrew Von Furstenberg. 

 

Care.com Repeatedly Investigated

While questions mounted from GoLocal, Raimondo’s team defended the promotion of Care.com. Even while the company was being investigated and paying penalties in the states.

In 2018, Care.com paid nearly $500,000 in a settlement with the Massachusetts Attorney General’s office.  “When families pay for a background check service, they should get what they paid for,” Attorney General Maura Healey said. “This settlement will provide restitution for families who were misled, and requires Care.com to ensure that parents know what they are getting when they purchase a background check.”

In 2020, Care.com Inc. agreed to pay $1 million in civil penalties and restitution to settle accusations over misrepresented background checks and auto-renewed subscriptions without getting consumers’ consent.

The district attorneys of San Francisco and Marin County, California, had claimed that Care.com falsely portrayed that its background checks included a search of the National Sex Offender Registry, which is available only to law enforcement officials.

“By misrepresenting their sex offender background checks, Care.com gave families a false sense of security about the stranger they were inviting into their homes. That practice will end immediately and consumers will be better off because of that,” San Francisco District Attorney Chesa Boudin said.

Despite the investigations and the penalties, Raimondo’s office continued to defend and push Care.com.

In an interview with GoLocal, Raimondo's Department of Human Services Director, Courtney Hawkins, defended the use of Care.com. "We're not talking about medical services or ones that require a license," said Hawkins. "Perhaps you have an elderly person and you're working — and maybe someone out of work would be willing to do that. I have to work. I have a 5-year-old out of school and I had to find a babysitter. Luckily I had a former teacher out of work reach out. Having [Care.com] services makes this easier."

Hawkins said Care.com does a "number of checks" on their website for people who sign up to offer to work. 

"There are four types of checks [and] there's a tab for safety. They vet every person — everyone who signs up goes through it," Hawkins had said, adding that approved caregivers would then get an "approved" symbol. 

 

Federal Action

Now, the federal action is the largest enforcement hit for the company.

As a result of the FTC’s action, Care paid more than $8.5 million that the FTC is using to compensate consumers impacted by the company’s deceptive practices. The settlement order also requires Care to make only non-misleading claims related to its earnings and job listings and provide a simple cancellation method.

The FTC is sending checks and PayPal payments to 194,207 affected consumers. Check recipients should cash their checks within 90 days, as indicated on the check. PayPal recipients should redeem their PayPal payments within 30 days.