"Something has to give, stop squeezing the little guy"
Web Developer Advocates For Small Business.
Rick Moghadam, the owner and chief developer at Metromedia Branded Companies has listened to the painful stories from contractors in Anderson and beyond for years. He knows the narrative all too well he claims. "It is not just contractors, it is everyone, they solicit your business, sell leads, and deliver trash," Moghadam explains why he wanted to start building replacement platforms to large-scale services like Home Advisor or MCA-Leads is because he has been on the other end of the phone more often than he would like to admit. "Telemarketing is not an effective way to advertise, and it could become illegal in the months to come," he discusses the struggle small businesses in the contracting industry have dealt with. "I hurt for these smaller businesses that are trying to get up and going, they pay these companies a high monthly fee, then get charged for the lead itself." Moghadam shows us several instances his clients from his funding company have paid these lead providers more money than they paid their whole staff. "The problem is that cost has to come from somewhere, while these lead providers are collecting money hand-over-fist, the contractors are stuck taking out high-interest advances to keep their businesses going," he claims that the lead generation businesses like Home Advisor are a direct result why the homeowner gets a high estimate or bill for their project.
F.T.C. Files Complaint on HomeAdvisor, Inc.
The Federal Trade Commission registered a complaint against Denver-based Home Advisor on March 11, 2022. HomeAdvisor, Inc. – a company affiliated with Angi – alleging it used a wide range of deceptive and misleading tactics in selling home improvement project leads to service providers, including small business people operating in the “gig” economy. The FTC’s complaint against HomeAdvisor alleges that since at least the middle of 2014 it has made false, misleading, or unsubstantiated claims about the quality and source of the leads the company sells to service providers, such as general contractors and small lawn care businesses, who are in search of potential customers. “Gig economy platforms should not use false claims and phony opportunities to prey on workers and small businesses,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “Today’s administrative complaint against HomeAdvisor shows that the FTC will use every tool in its toolbox to combat dishonest commercial practices.” For example, HomeAdvisor told service providers that its leads resulted in actual home improvement jobs at rates higher than HomeAdvisor’s own data supported. HomeAdvisor also misled service providers about the cost of an optional one-month subscription to a software platform that HomeAdvisor sold along with its leads, according to the FTC’s complaint. As a result of these misrepresentations, the complaint alleges, service providers often spend time following up on leads that are below the quality HomeAdvisor promises, and even more time seeking refunds from the company for those leads. HomeAdvisor, which also does business as Angi Leads and HomeAdvisor Powered by Angi, recruits service providers using marketing materials and agents who call the service providers and try to persuade them to join the company’s network. Once service providers join HomeAdvisor’s network, HomeAdvisor then sells them leads, which service providers use to contact potential customers for home services like kitchen remodeling or lawn care. Many of the leads HomeAdvisor sells consist of information submitted by consumers on the company’s website. It also resells leads it buys from third parties, known as affiliates, who generate the leads, in part, from web-based forms that ask consumers about potential home projects they are considering. Service providers who join HomeAdvisor’s network pay an annual membership fee of $287.99, in addition to a separate fee for each lead they receive. As part of their HomeAdvisor membership package, many service providers have also paid an additional $59.99 for an optional one-month subscription to a service called mHelpDesk, which includes software that helps with scheduling appointments and processing payments. This brings the total subscription fee to $347.98, with the mHelpDesk program automatically renewing at $59.99 per month until it is canceled. According to the complaint, HomeAdvisor’s sales agents and marketing materials have misrepresented the quality, characteristics, and source of the leads the company provides. First, while HomeAdvisor states that its leads concern consumers who intend to hire a service provider soon, many of them do not, the FTC contends. In addition, while HomeAdvisor represents that services providers only will receive leads matching the types of services they provide and their preferred geographic area, many of them do not. HomeAdvisor also represents to service providers that its leads are from consumers who knowingly sought HomeAdvisor’s assistance in selecting a service provider, while many of the leads it sells are actually purchased from affiliates and did not come from HomeAdvisor’s website. The complaint also alleges HomeAdvisor often tells service providers that its leads result in jobs at rates much higher than it can substantiate.
The Beta test, Anderson Handyman aims to solve the problem:
Homeowners depend on services like them to direct them to a qualified contractor. The service for the consumers is still needed, as such the need is still there for the contractors. The model developed by Metromedia's Moghadam boasts about no monthly fee for the contractors, and they only pay for leads that are monetized for the contractor eliminating the farming of data, and the gut-wrenching cost-per-lead they face. "This model allows the focus to return back to the consumer and stops the contractor from taking on underbid jobs that ultimately lead to cutting corners and profits," I asked him how do they do it, he said they are paid 3% of the job cost or $10.00 whichever is greater but only when they use the contractor we referred them to. Moghadam further continues "not every contractor will be allowed on the platform, they have to prove their ability," when I asked him how he plans to do that, he mentioned " a combination of visiting current or prior jobs, using them on one of Metromedia's properties, and of course, feedback from patrons of this site, we have a no-tolerance policy, and want to have the reputation that when a consumer fills out the form, they can rest assured they are getting quality at fair prices, nothing else is acceptable." He concludes the interview saying "yes, we will make money but we will be fair about it, we are here to solve a problem, the mission is more important than the paycheck."
Projected costs to the platform
The platform does more than to connect homeowners to contractors, it also has a centralized materials distribution and logistics system built into it to help both homeowners and contractors get the best pricing and best quality materials, it also has a materials buy-back program to recycle building materials and build the community up. Their hopes are to make the industry more cost-efficient and accessible while making efforts to cut back the carbon footprint the industry leaves behind. The total buildout of this project is slated at around $250,000.00 by completion and is live in Beta mode, the full build will launch in 2024 nationwide if this proves to be successful and will ultimately result in 1,000's of jobs across the country and they plan to launch the corporate office to the project in Anderson Indiana with corporate jobs for Hoosiers.
for media inquiries or questions please contact email@example.com.