The FTC and New York’s attorney general have accused Handy, the gig app customers can use to book cleaners, handymen, and more, of making deceptive claims about how much workers could earn through its platform.

In a complaint filed on Tuesday in the U.S. District Court for the Southern District of New York, the FTC and NY attorney general alleged that Handy, which is owned by Angi (formerly Angie’s List), advertised earnings that “don’t reflect the reality for the overwhelming majority of workers on the platform.” Handy also failed to clearly disclose fees and fines, the complaint alleged, leading to millions of dollars being withheld from workers.

Handy has agree to settle — but not admit any fault.

“[Handy] relied on inflated and false earnings claims to lure workers onto its platform,” Samuel Levine, director of the FTC’s bureau of consumer protection, said in a statement. “It then deducted inadequately disclosed fines and fees from their wages.”

According to the complaint, Handy marketed its platform as a way to get paid for jobs immediately. But its ads didn’t mention the fact that workers have to pay a fee — and in some cases, complete another job — to unlock the fastest payouts. (By default, it takes around a week to get paid for a Handy job.)

Handy also set unreasonable expectations about earnings, the FTC and NY attorney general alleged. In New York, New Jersey, and California, the app’s ads touted pay up to a rate only accessible to workers in its highest pay tier, which requires meeting difficult-to-reach criterion. In other markets, Handy advertised pay for handyman and furniture assembly jobs as high as $45 an hour, even when more than 90% of workers on the platform made less, per the complaint.

Moreover, Handy charged many workers opaque fines, the FTC and NY attorney general said — including fines incurred through no fault of workers. According to the complaint, a bug in Handy’s system resulted in jobs not being properly canceled and thousands of workers being fined $50. Workers could only avoid that fine if they took steps including giving GPS permission to Handy’s app and waiting more than 30 minutes at a job site.

Fees can be especially punishing for gig workers like those who rely on Handy as a primary source of income. In a 2022 survey by the nonprofit Economic Policy Institute, 14% of gig workers reported earning less than the federal minimum wage. One in five said they’d gone hungry because they couldn’t afford enough to eat; nearly one-third didn’t pay their entire utility bill in the month prior to the survey.

Handy itself has admitted that many of its workers are on public assistance or live in public housing, according to an FTC press release.

In a settlement proposed by the FTC and NY attorney general, Handy would pay $2.95 million to refund any workers harmed by the platform’s practices. Handy would also have to back up claims it makes about how much workers can potentially earn, and make it clear how workers can avoid its fees.

In a statement, Handy said it has agreed to the terms.

“Though we were prepared to litigate, we chose to enter into an agreement with these parties to put this matter to rest and get back to putting our 100% focus on supporting our customers: the small businesses who help Americans care for and maintain their homes,” a spokesperson told TechCrunch. “None of the agencies’ allegations were fair, and this settlement should in no way be construed as a validation of their allegations.”