The US Federal Trade Commission is cracking down on a gig work company called Arise Virtual Solutions for misleading users about how much money they could make.
Arise offers remote customer service contract work. But according to the FTC, the Florida-based company promised a pay rate of $18 an hour when in reality workers got closer to $12 per hour.
Allegedly, the company required users to spend hundreds of dollars on office equipment and to pay for training and background checks — all out of their own pocket.
“Defendant’s gig workers are often people of color, with about three-fifths identifying themselves as Black (51%), Latino (5%), or multiracial (5%),” the FTC said in the complaint. “About 90% of Defendant’s agents are women.”
(Credit: FTC)Following an investigation, the FTC announced on Tuesday a settlement with Arise, which will force the company to pay $7 million to compensate the affected gig workers.
On average, “just 36.8% of consumers who enrolled in one of Arise’s training programs successfully completed it – and those who left generally couldn’t get their money back on what they had to spend up front," the FTC says. "In addition, even consumers who jumped through all those hoops had to pay Arise nearly $40 a month in mandatory fees.”
Despite the settlement, Arise said in a blog post: “We fully disagree with the agency’s allegations and characterization of the facts. This settlement does not mean that we admit to wrongdoing, or that there was any finding of liability against Arise.
“Nonetheless, while we fully stand by the way we conduct our business, the risks and costs associated with litigation made clear that resolving this matter was the best path forward,” the company added.
Even so, the FTC’s settlement bars Arise from “making earnings claims without supporting evidence.” We reached out to the agency for details on how it’ll compensate affected users, and will update the story if we hear back.