Contractors sue HomeAdvisor, say site’s leads are ‘overwhelmingly bogus’

Digital marketplace HomeAdvisor is being sued by the owners of eight small home-improvement companies who say the Golden-based company twisted a lead-generation business into a vehicle for greed and abuse.

The plaintiffs all paid to be members of the site and for sales leads. They accuse HomeAdvisor of misrepresenting its services, and allege that the customer leads the company sells are “overwhelmingly bogus.”

The plaintiffs, who include the owners of Westminster-based B&B Carpentry, are seeking class-action status for the lawsuit, filed July 16 in U.S. District Court in Denver.

“The allegations are attacking the fundamental business that HomeAdvisor is operating,” said Kimberly Donaldson Smith with Chimicles & Tikellis, one of the attorneys representing the plaintiffs.

A spokeswoman for HomeAdvisor, which has agreed to take space in the HUB mixed-use development being built at 36th and Blake streets in RiNo, said the company does not comment on pending litigation.

In addition to Colorado, the plaintiffs own businesses in New Jersey, Illinois, California, Ohio, Florida, New York and Idaho, specializing in services ranging from home inspections to metal roofing.

The plaintiffs say they joined HomeAdvisor as a member between August 2014 and August 2017.

Brad and Linda McHenry, who own B&B Carpentry, told BusinessDen in an interview that they joined HomeAdvisor after a disappointing experience with the company’s predecessor, ServiceMagic, because they were told HomeAdvisor would refund them for money spent on “bogus” leads. They canceled several months later, having again been disappointed with the information provided. They claim they never received a refund.

Brad McHenry estimated they paid HomeAdvisor $3,500.

“I recognize that it’s not a huge amount, but it’s not chump change either,” he said. “And the reality is they robbed me of my time and my talent too.”

The McHenrys and the other plaintiffs are represented by Gordon Netzorg, Mark Williams and Carla Martin of the Denver office of Sherman & Howard, as well Donaldson Smith and other attorneys at the Haverford, Pennsylvania, and Wilmington, Delaware, offices of Chimicles & Tikellis.

The lawsuit makes claims about HomeAdvisor that range from the nature of the company’s business model to the culture of its Colorado offices. The allegations include:

• HomeAdvisor won’t tell companies, or “home improvement professionals,” in advance how much they will pay for each customer lead, but the amounts range from roughly $10 to $140.

• The leads sold to the companies are “overwhelmingly bogus” and “illusory” because they are often “over distributed” or contain, among other things, disconnected phone numbers, people who are not homeowners or contacts for nonexistent residences.

• HomeAdvisor represents that the majority of its leads are generated through its website, when a majority actually are generated by third-party affiliates, which generally result in less-useful leads.

• HomeAdvisor won’t let members turn off leads permanently, instead forcing those that want to avoid paying for leads to log in regularly to “freeze” leads.

• While members can set a budget for how much they want to spend on leads each month, if the budget is altered, it resets for the month, which can result in members paying for more leads than they want.

• When companies cancel their HomeAdvisor membership, HomeAdvisor leaves their company profile page on its website, and sells the information entered by individuals who attempt to contact the company to other Home Advisor members.

The attorneys representing the plaintiffs are familiar with HomeAdvisor. Two years ago, they filed a lawsuit against the company on behalf of Rochester-based Airquip Inc. That case is ongoing.

That lawsuit makes similar allegations to the one filed last week.

POSTED IN Retail, Top News

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11 Comments on "Contractors sue HomeAdvisor, say site’s leads are ‘overwhelmingly bogus’"

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davebarnes
Guest

Bogus leads! I am shocked!

Stacy Singleton
Guest

I am so angry right now 7 days 5 completely non-viable leads and they won’t give me my money back. Asked to talk to the boss of the boss and got hung up on.

Andy Braudway
Guest

We have never used their services, but so many of our clients have horror stories about the leads they received and how oversold they were. No one wins when you race to zero.

Jack Handborrow
Guest
What about the over 125,000 active contractors on HomeAdvisor that are paying for leads and are extremely successful ?? This article fails to mention that contractors can quit HomeAdvisor at any time and they decide how many leads they want and are in full control. If it was a scam and the leads were “overwhelmingly bogus” how come there are still active members? Some of which have been members for 5, 10 + years. At the end of the day this is advertising.. it is not an exact science.. if you put out a TV commercial and get 0 business… Read more »
Donna g
Guest

Well with 125000 contractors it’s been said only half have their leads on at the same time. I worked for Homeadvisor for over 2 years and used their service as a contractor. I was very frustrated for paying for leads on work I don’t even do. Bad contact, disconnected numbers, and I still paid. I feel the contractors pain and I stand with them.

Paul Allen
Guest
I will tell you why my leads are still turned on. After 52 leads in and only won one job because 80% of the 52 were bogus, terrible, non existent leads that you don’t get money back you just receive free leads. In my case I had over $2,300.00 of bad leads that they gave me a $1200 credit of free leads. All of the free leads were just the same. So I’m still in the hole. Once the free leads were exhausted we were uninfated with a ton of leads that we paid for. Even though I had my… Read more »
John Torre
Guest
Completely false statement. Home advisor will have one valid lead but will dispatch 20 plus tradesmen to that call and charge every single tradesmen regardless if they call or not. That’s a ripoff. They also send false leads that your stuck paying for. I personally traced 7 calls I recieved and found out they were spoofed and wrong numbers. One specific homeowner that was a valid call told me she had 37 tradesmen call within 30 minutes. Now if your charging $20 usd To each tradesmen times 37 HomeAdvisor is making a killing while the hard working man suffers. One… Read more »
TA Young
Guest
@Jack The lawsuit highlights the representations of Home Advisor (HA) as being misleading when service providers (HA Clients) sign on. Lead generating businesses prey upon the emotion and desperation of many gbusiness owners across the spectrum. For Software sales, a company can pay $2K++ for just one lead. The value is there, if the leads are qualified. Businesses are fully away that not every lead presents a sale. Instead of alleging that the plaintiffs are simply hiring a lead service searching to shortcut solid business practices, check out HA’s claims. HA promises to pre-screen leads. I’ve used them before, in… Read more »
Tom Stewart
Guest
This article does not look at the success a lot of businesses have had with Home Advisor, but it does bring up some plausible points. We have had success with Home Advisor and continue to use them, but I am concerned about a couple key flaws in their corporate structure. First, their return policy is unfair and seems to be set up to maximize profit not pursue a sense of fairness. Second, the third parties that try to generate leads seem to be incentivized to produce as many leads as they can, no matter the quality. When you combine an… Read more »
William Simmons
Guest
I did work for Home Advisor for six months and tried to turn off my leads number of times and would still receive leads I would call them and they would tell me it was a error and they were correct it so I would do the same thing so I got number of leads that was so bogus it was crazy first thing I told Home Advisor when I signed up with thim I didn’t want to be overwhelmed and I didn’t need that leads and they assured me I would be overwhelmed I would get just six leads… Read more »
Zee
Guest

I joined home advisor in March 2018 after the first month of receiving all bogus leads I told them to turn off my leads and max they could do was 90 days at a time I kept doing it until the end of my contract but then at the very end even though I turned them off they kept sending me leads and charge me $1000 and they want me to pay for it when I’ve never use their service this company is a total rip off I advise all contractors to stay away .