Major Caregiver Referral Site Removes Thousands of Bogus And Unverified Listings Prior To Investigation (#GotBitcoin?)
WSJ investigation had found that hundreds of day-care centers listed on its website as state licensed didn’t appear to be. Major Caregiver Referral Site Removes Thousands of Bogus And Unverified Listings Prior To Investigation (#GotBitcoin?)
The online child-care marketplace Care.com CRCM 2.01% scrubbed its site of tens of thousands of unverified day-care center listings just before a Wall Street Journal investigation published March 8, an analysis shows.
Care.com, the largest site in the U.S. for finding caregivers, removed about 72% of day-care centers, or about 46,594 businesses, listed on its site, a Journal review of the website shows. Those businesses were listed on the site as recently as March 1.
Publicly traded Care.com, with about 32 million caregiver and parent members, focuses largely on matching families with individual nannies and babysitters; parents also turn to the site to find and research day-care centers in their areas.
The day-care center listings in question were taken down from the site March 7, according to Nancy Bushkin, a Care.com spokeswoman. That was also the day of the company’s fourth-quarter earnings release.
Ms. Bushkin said the company had removed 45% of day-care centers in its database, a number that hasn’t been previously reported. She said the number is different than the Journal’s analysis because the company filters day-care center listings in its database through algorithms to “optimize the experience,” adding that the Journal saw only a subset of its total listings.
Ms. Bushkin declined to provide the current and prior total number of day-care centers on Care.com.
An earlier Journal investigation found that hundreds of day-care centers listed on Care.com as state licensed didn’t appear to be. Some of them appeared not to exist or to be aware they were on the site. The Journal’s reporting also showed the company’s limited vetting of caregivers on its site. The investigation found nine who had prior police records. The company has said it makes clear through its website and emails to customers that it doesn’t fully vet caregivers.
In addition to a monthly membership fee, the company sells screening packages to those interested in background checks.
Care.com shares dropped 13% on March 11, the first trading day after the article was published. The company in a securities filing that day also announced several changes to its business practices, including the removal of some “small and medium-sized business listings.” The stock is down about 3.5% since March 11 and closed on Friday at $19.76 a share.
In the filing, Care.com said it had used publicly available data to create directory listings for certain businesses that provide child-care services, a practice it said was common among digital platforms. It then asked those businesses to claim ownership of the listings.
Care.com, which didn’t disclose the number it had taken down, said in the filing it had removed the listings that weren’t claimed.
Most day-care centers listed on Care.com aren’t paying members; the company said day-care center listings represent less than 0.5% of its total revenue. Care.com charges members up to $39 a month to see and respond to its listings of babysitters and nannies; nonmembers can see its day-care center offerings.
The issue highlights the pressure on many internet platforms to attract customers by presenting a critical mass of listings to demonstrate scale, says Daphne Keller, director of intermediary liability at Stanford Law School’s Center for Internet and Society. She added that inactive or false listings don’t produce a good customer experience either. “You don’t want to have a bunch of listings in there that turn out to be dead ends,” Ms. Keller said. A Care.com spokeswoman declined to comment on Ms. Keller’s assessment.
Care.com, founded in 2006 by its current chief executive, Sheila Lirio Marcelo, went public in 2014 and has enjoyed several years of strong growth. Its largest stockholder is Capital G, a fund backed by Google parent Alphabet Inc.
The Journal’s March 8 article showed that Care.com performed limited vetting of caregivers and that some of the day-care centers falsely said they were state licensed. In one example, the mother of twin toddlers who drowned at a day-care center pool in Tennessee last year relied on Care.com’s day-care center listing for research. The listing said the center was state licensed, but it wasn’t.
The lawyer for that day-care operator declined to comment on the specifics of the accident. The Tennessee Department of Human Services said it believed the day-care center was operating legally on the day of the deaths, noting that a person can care for four unrelated children without a license. The day-care center had sent parents an email saying that seven children would have to be “let go” as the center pursued its licensing.
At the time, Care.com notified users in small type at the bottom of each listing that it didn’t verify day-care center listings; after the Journal’s March 8 article, it moved that warning to the top of the pages of day-care centers. It announced that change in the March 11 filing; it declined to comment on its filing.
In its securities filing, Care.com said it would no longer allow caregivers to begin applying for jobs on the site until the company had completed a “preliminary screening,” which Care.com previously told the Journal included checking multijurisdictional criminal databases and the National Sex Offender Public Website.
The company also created a new board committee to oversee the company’s safety and cybersecurity programs.
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