Our firm and a Pennsylvania firm have filed suit against Angie’s List on behalf of Janell Moore, a woman who did business with the company. With the tagline “Reviews you can trust,” Angie’s List promises to offer “unbiased” customer reviews about service providers. Ms. Moore, a Pennsylvania resident, is the lead Plaintiff in the federal class-action lawsuit filed in Philadelphia against “Angie’s List.” We allege in the suit that the Indiana-based company breached its contract and committed fraud. Boasting more than three million paid members, Angie’s List claims that it provides unbiased customer reviews about all sorts of service providers. Ken Grunfeld, a lawyer with Golomb and Honik, who is working on this case with us, had this to say about how this company operates: “We have learned that a contractor pays Angie’s List to be pushed up on Angie’s List ratings and to have other negative reviews suppressed.“
The complaint alleges that service providers pay Angie’s List fees for higher rankings in member searches, to suppress negative reviews, and to ensure that positive reviews are not suppressed. We allege in the suit that Angie’s List entices local consumers to pay for unfiltered business reviews. It’s alleged further that Angie’s List claims to be a “passive conduit” for consumer reviews and that its membership agreement claims rankings are based on actual consumer experiences. In reality, service providers can influence rankings by paying fees. According to Angie’s List investor relations department, approximately two-thirds of all revenues come from service providers. Advertising is a significant source of revenue for Angie’s List, bringing in much more revenue than subscriptions. In 2014, Angie’s List made $241.9 million from service providers and only $73.1 million from members. Ms. Moore claims in the suit that she joined Angie’s List in 2012 and used the web site to search for a contractor.
Ms. Moore chose a company with no reviews. However, when that “contractor ripped her off” and “she gave a negative review,” she later learned that other Angie’s List members had posted negative experiences. The court determined these allegations satisfied the fraud pleading requirements. We allege in the complaint that Angie’s List not only lied to consumers, it also breached several contract provisions. The court determined the claims were sufficiently pleaded. The court determined that:
the contract’s provisions unambiguously depict the website with which Ms. Moore contracted as a provider rating system based on first-hand consumer reviews, unshaped by input from any other source. [Moore] alleges a breach by averring that (1) an electrician of her acquaintance disclosed that he pays Angie’s List to alter his rating, and (2) she could not initially view all negative reviews of the provider she contracted with – both of which counter Angie’s List’s representation that it is simply a passive conduit for the publication of content about providers.
By rejecting Angie’s List’s effort to dismiss Ms. Moore’s lawsuit, the fraud and contract breach claims will proceed. Angie’s List bases its reputation on providing unbiased, customer-driven reviews. Dee Miles and Rebecca Gilliland from our firm, along with Richard Golomb and Ken Grunfeld from Golomb & Honik, will handle the case.
Cases like this one are critical to insuring that companies actually do what they say. If you need more information on the Moore case contact Rebecca Gilliland, a lawyer in our firm’s Consumer Fraud and Commercial Litigation Section, at 800-898-2034 or by email at Rebecca.Gilliland@beasleyallen.com.
Sources: Forbes.com, Philadelphia.cbslocal.com and golombhonik.com