Angie’s List draws criticism from Consumer Federation of America
The high-profile online purveyor of reviews of home improvement services, Angie’s List, has itself undergone an extensive review by a consumer watchdog group. And the results aren’t flattering.
A just-released report by the Washington, D.C.-based Consumer Federation of America identified a number of shortcomings with the service, including evidence of review manipulation and favoritism toward companies that advertise with the site.
Angie’s List derives almost all of its revenue from advertising purchased by local businesses that it lists and rates — from electricians and plumbers to roofers, remodelers, landscapers and lawn service companies, the Consumer Federation said.
“Angie’s List recommends and gives preferential treatment to these advertisers that can easily mislead consumers into thinking that these businesses are the best ones,” the group said in a news release Monday.
For example, only businesses that pay to advertise are recommended as “top-rated pros,” the report said.
The report also identified “circumstantial evidence” that the site contains fake customer reviews, and concluded that advertisers are given advantages over non-advertisers in listing placements and the ability to have negative reviews deleted.
Because such a large majority of businesses are given the same “A” rating — including some with only one customer review — it’s difficult for consumers to identify the best contractors, the report said.
Angie’s List responded to the report, saying that it is “disappointed with the many inaccuracies.” In its emailed statement, the company added that the report was based on a “fundamental misunderstanding of the various ways that consumers can use Angie’s List.”
“It is incorrect to assume that because part of our revenue is generated through advertising that our reviews are anything but fair and impartial,” the company said.
The federation’s report isn’t the first time some of the company’s practices have drawn scrutiny, including from Consumer Reports and NBC News. In 2016, Angie’s List settled three lawsuits that called into question its relationship with advertisers.
One of the biggest challenges for homeowners nationwide is finding highquality home services, the federation’s executive director, Jack Gillis, said during a conference call with reporters Monday.
Problems with home service contractors consistently make the top-10 list in the federation’s annual nationwide consumer complaints survey. For the last five years, home service complaints have ranked No. 2.
Despite its flaws, Angie’s List can be helpful to consumers who traditionally have had only friends and family to rely upon for referrals, the Consumer Federation said.
Among the group’s recommendations:
• Consumers should ignore the recommended and profiled companies on Angie’s List and instead look only at the customer reviews of A-rated businesses with at least 25 recent reviews.
• Pay the closest attention to detailed reviews, “which are most likely to be genuine.” Also give extra weight to negative comments. “Because of the way these customer reviews are collected and curated, businesses offering poor service may well have a large majority of positive reviews,” the report said.
• Recognize that the first businesses listed for each type of service are advertisers.
• Don’t rely on Angie’s List as the sole source of information when selecting a contractor. For example, getting competing bids and searching a company’s name online along with “consumer complaints” or “bad service” can head off problems.
Angie’s List, founded in 1995 and launched online in 1999, transitioned from a paid subscription service to an advertising-supported model in 2016.
The federation said users should be aware that names, addresses, phone numbers and emails that they provide to gain access to listings are shared with advertisers.
“While advertised as free, there is a price consumers pay for joining Angie’s List,” Mr. Gillis said. “Consumers must submit personal information and then expect phone calls and emails from advertisers.”
While consumers can cancel their memberships, “It doesn’t mean personal information hasn’t already been passed on to the various vendors,” he said.
Angie’s List disputed that finding.
“We do not give away data about our members to advertisers,” the company said in its emailed statement. “When a customer wants a direct connection with a pro, they can opt-in to direct outreach from available pros.”
The federation said its critique of Angie’s List was the first in an upcoming series of reports on popular online review sites, including Yelp and Craigslist.
The full Angie’s List report is available at www.consumerfed.org.