FTC and New York AG Take Legal Action Against Handy for Deceptive Worker Practices
The Federal Trade Commission (FTC) and New York Attorney General have filed a joint complaint against gig economy platform Handy, alleging widespread misleading advertising and unfair fee practices affecting thousands of workers. The home services app, owned by Angi (formerly Angie’s List), faces accusations of systematically overstating potential earnings while obscuring critical fee structures.
Key Allegations in the Complaint
- Inflated Earnings Claims: Handy allegedly advertised pay rates only achievable by a small fraction of top-performing workers
- Hidden Fees: The platform failed to properly disclose mandatory deductions from worker payments
- Unfair Penalties: Workers reportedly faced $50 fines due to system glitches beyond their control
“Handy relied on inflated and false earnings claims to lure workers onto its platform,” stated Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “It then deducted inadequately disclosed fines and fees from their wages.”
How Handy’s Practices Affected Workers
Payment Structure Issues
- Advertised “instant pay” required additional fees or completing extra jobs
- Default payment processing took approximately one week
- Highest advertised rates ($45/hour for some services) were earned by fewer than 10% of workers
Problematic Penalty System
- Technical glitches led to improper job cancellations
- Workers fined $50 unless they met stringent conditions like:
- Granting GPS access to the app
- Remaining on-site for over 30 minutes
The Human Impact of Gig Work Challenges
A 2022 Economic Policy Institute survey highlights the broader context:
- 14% of gig workers earn below federal minimum wage
- 20% report food insecurity due to insufficient earnings
- 30% couldn’t pay full utility bills in the previous month
The FTC notes Handy has acknowledged many workers rely on public assistance or live in public housing.
Proposed Settlement Terms
Handy has agreed to a $2.95 million settlement without admitting wrongdoing. Key provisions include:
- Creating a restitution fund for affected workers
- Providing transparent earnings disclosures
- Clearly explaining fee avoidance procedures
Company Response
“We chose to enter into an agreement to put this matter to rest,” a Handy spokesperson stated. “This settlement should in no way be construed as a validation of their allegations.”
The case underscores growing regulatory scrutiny of gig economy platforms and their treatment of contract workers. As the settlement moves forward, it may establish important precedents for transparency in the on-demand labor market.
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