The US Federal Trade Commission issued a proposed order that would require HomeAdvisor Inc. to pay $7.2 million for using deceptive practices when selling home improvement project leads to service providers, including those in the gig economy.

This is the agency’s first action since it issued its policy statement on enforcement related to gig work.

Denver-based HomeAdvisor is affiliated with Angi, formerly known as “Angie’s List,” according to the FTC. It recruits service providers such as general contractors and lawn care businesses to join its network.

Once in the network, HomeAdvisor sells them leads, which the service providers use to contact potential customers for home repair and maintenance projects. Service providers who join the network generally pay an annual membership fee of $287.99 in addition to a separate fee for each lead they receive. Some may also pay an additional $59.99 for an optional one-month subscription to a service called mHelpDesk, which includes software that helps with scheduling appointments and processing payments.

The FTC alleges that HomeAdvisor made false, misleading or unsubstantiated claims about the quality and source of the leads. For example, the company represented the service providers will only receive leads from matching the types of service they provide and their preferred geographic area, while many of the leads do not, according to the FTC.

In addition, the FTC alleges HomeAdvisor often tells service providers that its leads result in jobs at rates much higher than it can substantiate. The FTC also alleges that HomeAdvisor sales agents misrepresented the optional one-month mHelpDesk subscription as free.

Along with requiring HomeAdvisor to pay up to $7.2 million for redress, the proposed order prohibits the company from making any false or misleading claims regarding its leads, including that they concern individuals who are ready to hire a service provider or who submitted a request for home services directly to HomeAdvisor. It also bars HomeAdvisor from misrepresenting its products as free when they are not, or making unsubstantiated claims about the rate at which its leads convert into paying jobs.