Care.com said that since last year, it has introduced a required background check on its caregivers.
Care.com Inc., the nation’s largest online marketplace for babysitters and other caregivers, will 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, 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.
“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.
The district attorneys also said Care.com had unlawfully enrolled its customers in auto-renewal subscriptions without consent and without providing proper disclosures.
“We maintain that Care.com has always appropriately described the comprehensiveness of our products, including the automatically renewing nature of its subscriptions and that the background checks we have made available have always included databases of sex offender histories,” a Care.com spokesman said in an email.
Care.com said that since last year, it has introduced a required background check on its caregivers, and this includes a review of the National Sex Offender public website and criminal records.
The company could also be subject to permanent injunctions to settle a consumer suit alleging various unlawful business practices, the district attorneys said.
The settlement comes more than a year after an investigation by The Wall Street Journal found that the company performed limited vetting of its caregivers and largely left it up to families to determine whether a caregiver listed on the platform was trustworthy. The company did “preliminary screenings” of caregivers but didn’t undertake full background checks, verify credentials of caregivers or vet day-care centers listed on its site.
The company later said it would begin conducting in-depth background checks and identity verification procedures in screening caregivers in its online network.
In February, IAC/Interactive Corp. completed its acquisition of Care.com for about $500 million in cash, or $15 a share.
Care.com, which was founded in 2006, provides various services that enable families to seek care for children, seniors and pets. It is available in more than 20 countries.
Write to Kimberly Chin at kimberly.chin@wsj.com
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