Tthe Federal Trade Commission (FTC) issued a Complaint and a Decision and Order in 2012 regarding the elder care services referral franchise company CarePatrol, Inc. (Docket No. C-4379).
UnhappyFranchisee.Com investigated the issues behind the claims as well as our concerns that CarePatrol seemed to continue to make the same representations even after the FTC Order.
While he admitted that some old, outdated marketing verbiage related to their “grading” of assisted living facilites still needed to be deleted from the Internet (which he said was being done), CarePatrol CEO Chuck Bongiovanni explained why our other concerns were, in his opinion, unfounded.
UnhappyFranchisee.Com: Mr. Bongiovanni, thanks for clarifying the reason for and the somewhat confusing nature of the FTC Complaint and Order against CarePatrol.
As I understand it, you are saying that CarePatrol advertised (and advertises) that it monitors and grades assisted care facilities, which it does for states where CarePatrol has representatives. Separately, a national search engine optimization effort led you to list every state, even those where you do not have representatives, on your website. This led the FTC to charge, in 2012, that CarePatrol was being deceptive because your marketing implied that CarePatrol monitors and grades facilities in all 50 states, which it does not.
Chuck Bongiovanni: That’s correct. The statement that CarePatrol monitors and grades assisted care facilities was true in regard to the states where we have operations. Our mistake was inadvertently implying, by listing all 50 states on our website, that we had operations in every state and therefore monitored and graded in all 50 states.
As soon as we heard their objections, we deleted references to states where we didn’t have operations from the website and the statements were no longer incorrect or misleading. it was just an SEO problem that was fixed in 10 minutes after the FTC contacted me the first time. We didn’t even wait until they made the decision, we did it immediately and absolutely cooperated.
The complaint never came from a customer, no one was ever harmed or had the potential of being harmed. This was an administrative investigation. We would not recommend a community to someone in which we never personally walked into or verified their state violations.
The FTC asked us for data for the states we were listed in and were satisfied with the results. We did look up the violations for every community that we contracted with. Mind you, we were never fined or found guilty of anything in regard to the areas where we have operations. If the FTC found us blatantly lying or deceiving, we would have been fined and found guilty.
UnhappyFranchisee.Com: Do you require your franchisees to monitor violation reports in their markets?
Chuck Bongiovanni: Absolutely. The state of Washington forces us and every agency to look up every violation PRIOR to recommending them. We mandated this for EVERY FRANCHISEE BEFORE Washington even had the bill thought up or written. We were the ONLY agency in the nation that held to those high standards.
UnhappyFranchisee.Com: What about the claim that CarePatrol grades every facility from “A” to “F” We have found dozens of CarePatrol web pages that still make that claim.
Chuck Bongiovanni: Again, grading wasn’t an issue in the FTC Complaint. Naming a state that we didn’t grade was and that was an SEO issue that we fixed.
We did discontinue “grading” in 2012, a few months before we were called by the FTC. We felt better sharing the violation reports with the family then just giving them a grade. No one else does this in the industry.
As for references to grading still being out there, we had several web design companies do work for us over the years and sometimes. It is difficult to get an accurate account of every webpage that was built, but we have made every effort to take care of it. I met with my IT team this morning and we are confident that everything is gone with any of those references. If found by anyone, we would eliminate the page within the hour.
UnhappyFranchisee.Com: Have you been complying with the record-keeping and disclosure terms of the order? Specifically, you are required to provide a copy of the complaint and order to each new franchisee (or principal, member, partner, director), and to provide the FTC with a signed and dated acknowledgment within 30 days, right?
Chuck Bongiovanni: The order stated we had to give a copy to any franchisee OR anyone who had internet advertising responsibilities. Our franchisees are prohibited to advertise on the internet, but we go one step further and do discuss and show the FTC order to every new franchisee in training. Proper acknowledgement was given in the time allotted or even before the deadline. By the way. One week after this investigation closed, the FTC worked very closely with us in investigating a very large competitor.
UnhappyFranchisee.Com: As for the Item 3 disclosure in your FDD, are you confident that it’s OK that you did not mention the Order, and the franchisee obligations that come with it?
Chuck Bongiovanni: Our attorneys update and recommend changes to our FDD. His name is Dan Warshawsky. We are confident in his abilities and legal representation. The franchisees had NO OBLIGATIONS since they do not and cannot advertise on the internet according to our FDD at any time. Since they cannot advertise or have a website up on the internet, they do not have any obligations.
My statement is on record with the FTC that we made no intent to deceive and it was just a SEO problem that was fixed in 10 minutes after the FTC contacted me the first time. We didn’t even wait until they made the decision, we did it immediately and absolutely cooperated.
Again, there may have been some remnants of sites or videos still out there. I asked my IT team to make an audit today and take down anything remotely close to it.
UnhappyFranchisee.Com: We see that a number of videos and web pages have been corrected or deleted based on our reporting. We appreciate your swift action and for taking the time to explain your side of the issues raised by the FTC Complaint and Order.
Chuck Bongiovanni: Thank you.
CAREPATROL Investigation & Discussion Links
CAREPATROL Investigation: Documents & Links (Includes actual CarePatrol FDDs and FTC Documents)
CAREPATROL Franchise Complaint – Updated October 11, 2010
CAREPATROL: Franchisees Praise the CarePatrol Franchise October 14, 2010
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TAGS: CarePatrol, CarePatrol senior services, CarePatrol FTC violations, FTC, Federal Trade Commission, CarePatrol franchise, CarePatrol investigation, Chuck Bongiovanni, unhappy franchisee