Contractors Sue HomeAdvisor for Fraudulent Practices

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A group of nine home improvement contractors from eight states have launched a class action lawsuit against HomeAdvisor Inc. and its parent company, IAC/InterActiveCorp, alleging that the lead generation platform uses misleading sales techniques to sell contractors “bogus leads” to generate higher profit.

In the lawsuit, filed in the U.S. District Court in Denver, the contractors allege that HomeAdvisor’s sales team uses “false promises of success and misrepresentations of membership conditions” to aggressively sell membership into a platform based on “systemically flawed leads.”

“In contrast to fixed-cost membership platforms, like Angie’s List, where the homeowner pays a fee to have access to a directory of screened and customer-reviewed contractors to use for search and selection purposes, HomeAdvisor’s business model turns such conventional behavior upside down by selling memberships to HSPs [home service professionals] plus charging HSPs the cost of each supposed ‘qualified’ homeowner lead,” states the suit. The plaintiffs cite leads to disconnected numbers, homeowners who have never heard of HomeAdvisor and addresses for vacant lots among other issues.

The plaintiffs further accuse HomeAdvisor of using “nefarious means, including abject misrepresentations and threats,” to coerce contractors to sign up for the platform before “charging [users] for products and services they do not affirmatively seek and agree to receive”. Further driving home their point, the lawsuit includes comments from former employees who describe HomeAdvisor call centers as sites of “frequent use and sale of illicit drugs, and alcohol consumption by staff members during business hours.”

The lawsuit sites corroboration of these allegations from more than 880 home service professionals who have used HomeAdvisor.

The plaintiffs are represented by Chimcles & Tikellis, a Pennsylvania law firm specializing in class action lawsuits—and no stranger to HomeAdvisor. Chimcles & Tikellis filed a lawsuit in 2016 on behalf of three home service professionals against HomeAdvisor and IAC. That lawsuit, which also targeted HomeAdvisor’s lead generation, is still ongoing.

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HomeAdvisor, lead generation, fraud

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