A new report by the Washington, D.C.-based Consumer Federation of America cited evidence of review manipulation and favoritism toward companies that advertise on the site.
Founded in 1995 and launched online in 1999, Angie’s List transitioned from a paid subscription service to an advertising-supported model in 2016. Since then, Angie’s List has derived almost all of its revenue from advertising purchased by local businesses that it lists and rates, mainly home services providers. These include landscape and lawn care companies.
“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.
For example, only businesses that pay to advertise are recommended as being “top-rate" or “the pros,” the report says.
According to the story, the report also identified “circumstantial evidence” that the site contains fake customer reviews. It concluded that advertisers are given advantages over non-advertisers in listing placements and the ability to have negative reviews deleted.
It’s difficult for potential consumers to identify the best contractors, the report said, because such a large number of businesses are given the same “A” rating, including some with only a single customer review.
Angie’s List has responded to the report, saying that it is “disappointed with the many inaccuracies.” In an 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 in the statement.
This isn’t the first time the company’s practices have been scrutinized; there were previous reports from Consumer Reports and NBC News. In 2016, Angie’s List settled three lawsuits that called its relationship with advertisers into question.
In a conference call with reporters, Jack Gillis, the federation’s executive director, said that finding high quality home services providers is one of the biggest challenges homeowners face nationwide.
In the federation’s annual nationwide consumer complaints survey, problems with home services contractors consistently make the top 10 list. And for the last five years, home services complaints have ranked No. 2.
However, the Consumer Federation also pointed out that Angie’s List, despite its flaws, can be helpful to consumers who only have friends and family to rely upon for referrals.
Some of the practices cited by the report sound similar to those used by other popular online review sites such as Yelp and Craigslist. They haven’t been ignored: the federation says the critique of Angie’s List is just the first in an upcoming series of reports on review sites.
The group made some recommendations for Angie’s List users. Among them:
- Consumers should ignore the recommended and profiled companies 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.” 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 stated.
- 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.
The full Angie’s List report is available at www.consumerfed.org