The FTC's HomeAdvisor settlement, explained for contractors

What happened, in brief?

The Federal Trade Commission brought an administrative case against HomeAdvisor, Inc., which the complaint noted also did business as Angi Leads. The FTC alleged that HomeAdvisor misled the home service businesses that bought its leads. HomeAdvisor did not go to trial. It agreed to a consent order, which is a settlement. It accepted restrictions and a payment, and no judge found the allegations true.

This guide sets out what the public record says, in order, using the FTC's own documents. It is general information, not legal advice.

Timeline

What did the FTC allege?

The public version of the complaint alleged that since at least mid-2014, HomeAdvisor made false, misleading or unsubstantiated claims about its leads. In summary, the FTC alleged that HomeAdvisor:

• represented that leads came from people who intended to hire a service provider soon, when many did not;
• represented that leads would match the services and areas pros had chosen, when many pros received leads that did not;
• represented that leads came from consumers who knowingly sought out HomeAdvisor, when many were purchased from third parties;
• claimed lead-to-job conversion rates well above what it could substantiate.

The complaint also described pros spending time seeking, often unsuccessfully, credits and refunds. It said HomeAdvisor did not let pros preview leads before receiving them and did not generally provide refunds, granting credits at its discretion.

On fees, the complaint gave an annual membership of $287.99 on top of per-lead charges, and a membership package sold for $347.98 that bundled a month of mHelpDesk software, which then renewed automatically at $59.99 a month unless cancelled. The FTC alleged that since at least 2015, sales agents represented that optional first month as free. The per-lead price range in the public complaint is redacted.

These are allegations. The signed consent agreement records that HomeAdvisor neither admitted nor denied them, and no court or administrative law judge ruled on them.

What did the settlement require?

On January 23, 2023, the FTC announced the proposed order. HomeAdvisor agreed to pay up to $7.2 million and to stop the conduct the FTC described. The order:

• bars false or misleading claims about its leads, including that the people behind them are ready to hire or asked HomeAdvisor directly for help;
• bars unsubstantiated claims about the rate at which leads convert into paying jobs;
• bars misrepresenting its products as free when they are not.

The FTC's announcement described two pools for the money: payments of up to $30 to pros affected by the lead-quality claims, and up to $59.99 to pros told the first mHelpDesk month was free. The FTC's analysis of the proposed order adds that HomeAdvisor had to make an initial payment of $4,448,000 toward that total. The Commission approved the final order on April 21, 2023.

What is a consent order, and why does the wording matter?

A consent order is an agreement between the FTC and a company that ends a case without a trial. The company agrees to rules about its future conduct and, often, to pay money that the FTC uses for refunds. The FTC can enforce the order if the company breaks it. Its January 2023 release notes that a final consent order "carries the force of law with respect to future actions," and that each violation may bring a civil penalty of up to $50,120. What a consent order does not do is decide whether the original allegations were true.

That is why careful writing about this case says "the FTC alleged" and "HomeAdvisor settled". You will see blog posts and sales pitches that describe the outcome in much stronger terms. Those descriptions go beyond the record. If a vendor uses this case to sell you something, check whether their summary matches the FTC's own press releases linked on this page.

The money also wasn't a penalty in the everyday sense. The order calls it consumer redress, and when the Commission approved the final order it wrote that the money would be used to partially reimburse service providers harmed by the practices described in the complaint. It went out through the refund program below.

Who got refunds?

In November 2023 the FTC sent more than $3 million in 110,372 checks to businesses that paid for HomeAdvisor memberships. Those checks related to the lead-quality allegations, and the FTC told recipients to cash them within 90 days. It also sent 91,273 claim forms to businesses that paid for mHelpDesk, with a deadline of February 26, 2024. That claims window has closed.

The FTC's release carried a warning worth repeating: the Commission never requires people to pay money or provide account information to get a refund. If anyone contacts you today offering to recover HomeAdvisor money for a fee, be cautious.

What happened in the Airquip class action?

Separately from the FTC, a group of home service businesses sued HomeAdvisor in 2016, in a case known as Airquip, Inc. v. HomeAdvisor, Inc. (D. Colo.), alleging deceptive practices around lead quality.

On January 10, 2024, the court certified a nationwide misappropriation class and three state misappropriation classes, and denied certification of the nationwide and nine state deceptive-practices classes. In July 2024 the Tenth Circuit denied the plaintiffs' petition for an early appeal of that ruling, and on March 11, 2025 the district court refused to let them file a second class certification motion. According to the docket, the parties filed a notice of settlement on April 2, 2025, and a stipulated dismissal with prejudice two days later. The terms were not made public.

So the class action did not produce a ruling that HomeAdvisor's leads were deceptive. The deceptive-practices classes were not certified, and the case ended in a private settlement.

How is Angi different now?

The FTC complaint described conduct from mid-2014 until it was filed in 2022. Since then, Angi has changed how matching works. In its first-quarter 2025 earnings release, Angi said it had implemented homeowner choice on nearly all experiences in its domestic business, so consumers are connected only with available pros they select. Its 2025 annual report dates that change to January 2025 and says match fees are charged even when a pro never gets hired for the work. Angi's help center now spells out a lead credit process. Among other conditions, a lead qualifies only if it is less than 45 days old and you attempted a call within 24 hours of receiving it, and accounts on an annual subscription are excluded. Approved credits go toward future leads and lapse if unused for six months. For today's pricing and credit rules, see what Angi leads cost.

What should contractors take from the case?

You don't need to take a side on the allegations to learn from them. The complaint is, in effect, a list of questions every buyer of leads should ask any platform:

1. Where do the leads come from? The vendor's own site and app, or partners and purchased traffic?
2. Did the customer knowingly ask to be contacted by a contractor like me?
3. Will leads match my services and ZIP codes, and what happens when they don't?
4. What conversion rate are you claiming, and on what data? Treat any close-rate promise as something to test, not believe.
5. What add-ons are in this package, and when do they start billing?
6. What is the credit or refund policy in writing?

Watch for warning signs on any sales call, from any vendor:

• A close rate or return figure offered as typical, with no explanation of how it was measured.
• Pressure to sign the same day, or a discount that expires at the end of the call.
• Software, listings or other extras bundled into the first month as free, with renewal terms you have to ask about.
• Vague answers about where leads come from or how many companies receive them.
• A refund policy that exists only as something the rep said.

Then measure. Track every lead from every platform to a booked job or a lost reason, so your own numbers tell you whether a channel works. Our guide to tracking lead sources shows how.

The deeper lesson is about dependence. When most of your work arrives through a channel you rent, you are exposed to whatever that channel decides about pricing, quality and rules. Building a website, a Business Profile and a customer list you control reduces that exposure. That is what our own your leads approach is about, and a free system quote is a low-effort way to see how dependent you are today.

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