The Federal Trade Commission (FTC) has reached a settlement with Arise Virtual Solutions for misleading consumers about potential earnings on its platform. The FTC alleges that Arise made false claims about the high pay rates available through its gig work opportunities, advertising rates of up to $18 per hour. In reality, internal documents showed the average pay was significantly lower, around $12 per hour, and many workers earned less than the advertised rate.
Under the proposed settlement, Arise will pay $7 million to refund consumers who were misled by the company’s inflated earnings claims. The settlement also requires Arise to substantiate any future earnings claims and adhere to the FTC’s Business Opportunity Rule, which mandates clear and truthful disclosures about potential earnings and associated costs. Additionally, Arise must cease making misleading claims and ensure that all future marketing is compliant with FTC regulations.
The complaint highlights that Arise not only exaggerated earnings potential but also imposed significant upfront costs on consumers, including fees for equipment and training. Workers were also charged ongoing monthly fees, further reducing their effective earnings. Arise’s failure to provide proper disclosures and refunds when earnings fell short of promises led to significant consumer dissatisfaction and financial loss.
This settlement marks a significant enforcement action by the FTC in the gig economy sector, aiming to protect workers from deceptive practices. Arise’s practices also face scrutiny from the U.S. Department of Labor over worker classification issues. The settlement and ongoing litigation underscore the FTC’s commitment to ensuring fair and transparent business practices in the rapidly evolving gig economy.
