Current:Home > ScamsFTC says gig company Arise misled consumers about how much money they could make on its platform -GrowthSphere Strategies
FTC says gig company Arise misled consumers about how much money they could make on its platform
View
Date:2025-04-15 17:55:00
NEW YORK (AP) — The Federal Trade Commission is taking action against a gig work company, saying it misled people about the money they could make on its platform.
Arise Virtual Solutions reached a settlement with the FTC, agreeing to pay $7 million to workers the FTC says were harmed by the company’s misconduct. Arise is a technology platform that connects major companies with customer service agents who freelance on its platform.
“Arise lured in workers with false promises about what they could earn while requiring them to pay out-of-pocket for essential equipment, training, and other expenses,” FTC Chairwoman Lina Khan said in a statement Tuesday. “Operating in the ‘gig’ economy is no license for evading the law, and the FTC will continue using all its tools to protect Americans from unlawful business practice.”
Arise lists Carnival Cruise Line, Dick’s Sporting Goods and Intuit Turbotax as clients.
“While we vehemently disagree with the FTC’s allegations and characterization of the facts, we have reached this agreement — which is not an admission or finding of liability or wrongdoing — so we can keep moving our business forward without the ongoing distraction and cost of litigation,” Arise said in a statement. “We stand by our mission of helping entrepreneurs find advancement in an environment that lets them build their businesses around flexible work serving as independent contractors providing services to world-class companies.”
In its complaint, the FTC said Arise made misleading advertisements, claiming people who signed up on their platform could get jobs paying up to $18 per hour doing remote customer service work. But when the company advertised the $18 per hour figure in 2020, its internal documents said the average pay for jobs on its platform was $12 an hour, and 99.9% of the consumers who joined its platform from 2019 to 2022 made less than $18 per hour, the FTC said.
People who join the Arise platform spend hundreds of dollars buying equipment including computers and headsets and paying for training programs that are required before working on the platform, the FTC said.
“They sell them on these training courses that they have to pay for, but then a high proportion don’t pass the training and get the job, so they just paid for nothing,” said Shannon Liss-Riordan, attorney and founding member of Lichten & Liss-Riordan, a law firm in Massachusetts. Liss-Riordan has sued Arise multiple times on behalf of workers. “I can’t really imagine $7 million will change its way of doing business, but hopefully it’s a shot across the bow that its practices are being more closely scrutinized by more arms of the government.”
The FTC also said Arise violated its Business Opportunity Rule, which requires that prospective workers receive key disclosures about earnings claims before they invest time and money in a business opportunity. It was the first time FTC charged a company with that violation.
That decision could affect more gig work platforms, because “even if the platform does nothing to mislead workers, the platform might violate the rule if it doesn’t give workers an extensive disclosure document,” said Erik Gordon, professor at Ross School of Business at University of Michigan.
veryGood! (91)
Related
- Most popular books of the week: See what topped USA TODAY's bestselling books list
- Two Florida residents claim $1 million prizes from state's cash-for-life scratch-off game
- Deposition video shows Trump claiming he prevented nuclear holocaust as president
- Emily in Paris star Ashley Park reveals she went into critical septic shock while on vacation
- Taylor Swift Eras Archive site launches on singer's 35th birthday. What is it?
- Do you know these famous Aquarius signs? 30 A-listers (and their birthdays)
- Japan becomes the fifth country to land a spacecraft on the moon
- How Patrick Mahomes Scored the Perfect Teammate in Wife Brittany Mahomes
- Are Instagram, Facebook and WhatsApp down? Meta says most issues resolved after outages
- Get 86% off Peter Thomas Roth, Tarte, It Cosmetics, Bareminerals, and More From QVC’s Master Beauty Class
Ranking
- New Mexico governor seeks funding to recycle fracking water, expand preschool, treat mental health
- AC Milan goalkeeper Maignan walks off field after racist chants. Game at Udinese suspended briefly
- Election-year politics threaten Senate border deal as Trump and his allies rally opposition
- Real Housewives of New Jersey Star Melissa Gorga Shares Cozy Essentials To Warm Up Your Winter
- Nearly half of US teens are online ‘constantly,’ Pew report finds
- Roxanna Asgarian’s ‘We Were Once a Family’ and Amanda Peters’ ‘The Berry Pickers’ win library medals
- How Patrick Mahomes Scored the Perfect Teammate in Wife Brittany Mahomes
- Adam Harrison, a son of ‘Pawn Stars’ celebrity Rick Harrison, has died in Las Vegas at age 39
Recommendation
EU countries double down on a halt to Syrian asylum claims but will not yet send people back
Video shows explosion in Washington as gas leak destroys building, leaves 1 injured
More searching planned at a Florida Air Force base where 121 potential Black grave sites were found
Sports Illustrated lays off most or all of its workers, union says
Apple iOS 18.2: What to know about top features, including Genmoji, AI updates
Sen. Tim Scott to endorse Trump at New Hampshire rally on Friday, days before crucial primary
The Challenge's Ashley Cain Welcomes Baby 2 Years After Daughter's Death
Caffeine in Panera's Charged Lemonade blamed for 'permanent' heart problems in third lawsuit