FTC Slams Company Raimondo Pushed on Rhode Island During COVID

FTC Slams Company Raimondo Pushed on Rhode Island During COVID

Just weeks after COVID broke out in Rhode Island, then-Governor Gina Raimondo began pushing the services of Care.com.

GoLocal unveiled a series of ties between high-profile donors Raimondo and other top Democrats' financial interests in Care.com. The company had been fined and there were growing concerns and regulatory actions against the company.

Now, the Federal Trade Commission (FTC) announced on Monday it is taking action against Care.com ("Care") alleging that the child and older adult care gig platform has systematically deceived caregivers who were looking for jobs while failing to give families seeking care a simple way to cancel their paid memberships.

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In a federal court complaint, the FTC alleges that Care’s marketing messages about both the number of jobs available on their site and the amount workers could expect to be paid were deceptive.

According to the FTC, Care has agreed to a settlement that will require it to turn over $8.5 million to be used to refund consumers harmed by their practices, as well as requiring the company to be able to back up the earnings claims it makes and be honest about the number of jobs available on their site.

“Care.com used inflated job numbers and baseless earnings claims to lure caregivers onto its platform, and used deceptive design practices to trap consumers in subscriptions,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection “The order announced today puts a stop to these unlawful practices, returns millions of dollars to consumers, and helps ensure an honest marketplace for families looking for care and caregivers looking for work.”

 

Raimondo Pitching Care.com to RI

On March 24, 2020, at a press conference, Raimondo and then-Department of Human Services Director Courtney Hawkins announced that the state of Rhode Island had "partnered with Care.com to increase child care access for frontline workers responding to the COVID-19 crisis. In addition to providing 90 days of ‘free, premium access’ to their services, Care.com has created portals specifically for frontline workers and caregivers in Rhode Island.”

Today, Hawkins serves as the chief operating officer for Providence Mayor Brett Smiley — he was Raimondo’s Director of Administration.

Raimondo continued to push Care.com to Rhode Island families for months at her daily COVID briefings.

 

Top Democrats with Links to Raimondo and Care

Care.com was purchased in December 2019 for $500 million by IAC in —February of 2020; at the time of the deal with the Raimondo administration, IAC was 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. 

 

How Care.Com Came to RI

Hawkins claimed in March of 2020 that Rhode Island was approached by Care.com for the partnership. 

"I was actually trying to work on this at the Department to establish a registry for people to provide care -- and literally the next day someone from government relations at Care.com outreached to someone in the [Raimondo] Administration on this," said Hawkins.

Hawkins said the Care.com outreach was to Brian Gosselin, the Chief Strategy Officer at RI EOHHS, by someone "who had previously worked with him."

Gosselin was formerly a top-level veteran of former Massachusetts Democratic Governor Deval Patrick's administration. But in Massachusetts the company had been fined.

 

Raimondo Ignored Red Flags - Multiple Violations by Care.com in 2020 and Earlier

While Raimondo was signing up Care, the company has already been fined nearly $500,000 by Massachusetts regulators. That fine was levied in 2018.

“Care.com has agreed to pay more than $480,000 and change its practices to resolve allegations that the company misled Massachusetts families about the comprehensiveness of its background check products,” then-MA Attorney General Maura Healey announced.

And in 2020, California prosecutors announced Care will pay $1 million in civil penalties and restitution to settle accusations over misrepresented background checks and auto-renewed subscriptions without getting consumers’ consent, according to the Wall Street Journal.

“The district attorneys of San Francisco and Marin County, Calif., alleged 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, and that its higher-priced background checks provided a more robust examination than the lower-priced ones,” reported the Wall Street Journal in 2020.

“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.

Raimondo’s office at the time refused to respond to questions from GoLocal about the California settlement with Care.com.