FTC and Arise Virtual Solutions Agree to $7 Million Settlement for Misleading Gig Workers

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FTC and Arise Virtual Solutions Agree to $7 Million Settlement for Misleading Gig Workers
A typewriter with the word gig economy written on it. Markus Winkler/ Pexels

The Federal Trade Commission has initiated legal actions against a gig work company, alleging that it provided misleading information to individuals regarding the potential earnings on its platform.

Arise Settles with FTC Over Alleged Gig Work Misrepresentation

Arise Virtual Solutions has reached a settlement with the FTC, in which they have agreed to pay $7 million to workers who were allegedly harmed by the company's misconduct.

Arise is a cutting-edge technology platform that seamlessly links prominent companies with skilled customer service agents who work independently on its platform.

The FTC's complaint alleges that Arise's advertisements were misleading, as they promised potential job seekers the opportunity to earn up to $18 per hour by doing remote customer service work.

However, according to internal documents, the company's average pay for jobs on its platform was actually $12 an hour, despite advertising a $18 per hour figure in 2020. Additionally, the FTC revealed that 99.9% of consumers who joined the platform between 2019 and 2022 earned less than $18 per hour, Bloomberg Law reported.

According to the FTC, individuals who become part of the Arise platform invest a significant amount of money in purchasing equipment such as computers and headsets, as well as paying for mandatory training programs.

FTC Challenges Arise Virtual Solutions Over Business Opportunity Rule Violation

The FTC has also found that Arise has been in violation of the Business Opportunity Rule. This rule mandates that individuals considering a business opportunity must be provided with important information about potential earnings before they commit their time and money, according to AP News.

This marked a significant milestone as the FTC took action against a company for the first time in relation to that particular violation.

The potential impact of that decision extends to other gig work platforms. According to Erik Gordon, a professor at the Ross School of Business at the University of Michigan, even if a platform is not intentionally misleading workers, it could still be in violation of the rule if it fails to provide workers with a comprehensive disclosure document.

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