The US Federal Trade Commission (FTC) has announced a $7 million fine against remote customer service platform Arise Virtual Holdings for misleading potential employees about their potential earnings on the platform.
The FTC, which filed a final injunction against Arise in the US District Court for the Southern District of Florida, accuses the company of falsely marketing work-at-home jobs for major national brands with promises of $18 an hour. The company actively marketed remote customer service opportunities online, targeting homemakers and almost always involving African-American women, according to the FTC filing.
Arise Virtual Holdings, a remote customer service platform, has been fined by the FTC for misleading potential employees about their potential earnings. The company advertises work-at-home jobs for major national brands with the promise of $18 an hour, but the average salary is only $12 an hour. In addition, the company forces employees to spend their own money on the necessary equipment and training. Arise is also accused of misclassifying workers as independent contractors, depriving them of minimum and overtime pay.
FTC Chairwoman Lina Hahn said, “Arise lured workers with false promises of earnings while forcing them to pay out-of-pocket for necessary equipment, training and other expenses.“
According to internal company documents, FTC investigators found that from 2019 to 2022, the average salary on the Arise platform was just $12 an hour. Arise continued to advertise earnings of $18 an hour, even after receiving several notices from the FTC to take down the false ads.
In addition, court documents show that Arise forced employees to spend hundreds of dollars to purchase or finance work equipment such as computers and headsets, and in some cases even charged up to $250 for training programs. In addition to initial costs, Arise also charges platform workers nearly $40 per month in mandatory fees, the FTC said.
Arise has agreed to settle the case with the FTC, but does not admit fault or admit liability for any wrongdoing. The company says it is working on key aspects of the solution and plans to improve its business practices in the future.