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More and more people are becoming familiar with the joys — and frustrations — of online dating. A recent Pew study found that 11 percent of the US public has used online dating services, and a full 38 percent of people who say they are “single and looking” have used such sites.
There’s enough money to be made as an Internet matchmaker that it’s apparently sparking some companies to push the boundaries of what’s legal. Yesterday, the Federal Trade Commission disclosed that it reached a settlement with JDI Dating Ltd., a UK company that runs 18 dating sites that it claims have over 12 million members. The sites include. JDI will have to pay $616,165 in redress, and it must stop business practices that were said to violate both the FTC Act and a newer law that regulates recurring billing online.
JDI’s dating sites would make fake profiles, which the company called “virtual cupids,” and have them send computer-generated messages to new users who had created profiles but hadn’t yet paid. On JDI’s websites, users received an e-mail notifying them that another user sent them a “wink” within minutes of joining. Then they got additional winks, messages, and photo requests, supposedly from other members in their geographic area.
Those messages came from the bogus “virtual cupid” profiles that JDI had on FlirtCrowd and other sites. The only indication that the profile was fake was a tiny logo ukrainian bride with the letters V and C. The “virtual cupids” had photographs and personal info that mimicked real profiles and were made to appear geographically close to consumers using the site.
“We don’t want consumers paying money to talk to people who don’t really exist,” said Steve Baker, director of the FTC’s Midwest Region Office. “If consumers are having problems with dating websites, we’d like to hear it.”
Problematic billing practices
In the eyes of the FTC, the “virtual cupids” were a deceptive business practice. But JDI made that mistake worse by not making clear that it was going to slap customers’ credit cards with recurring charges. In 2010, Congress passed the Restore Online Shoppers Confidence Act, or ROSCA, which requires companies to clearly disclose that consumers are signing up for a recurring charge and to provide a simple way to stop the charges from continuing when they decide to cancel.
JDI did neither. “ROSCA is meant to protect people from being continuously billed without knowing it,” said Baker in an interview with Ars. “JDI’s terms and conditions said how to cancel, but people emailed and didn’t get canceled. Instead they got another email, saying ‘Gee, we want to know why you’re thinking about canceling’ or ‘Here’s another two weeks free.’ People didn’t get canceled. They made it difficult.”
The FTC’s interest in enforcing ROSCA appears to be just beginning. The JDI case is the second time the agency has reached a settlement based on the law; the first was last week, when the FTC announced that it had taken action against several makers of supplements and weight-loss products.
ROSCA is meant to regulate the offering of “negative option” billing, in which a consumer must take action to stop paying for a product. In the case of FlirtCrowd, the company offered options to buy one-month, three-month, six-month, or 12-month memberships, ranging from $8.42 per month to $22.72 per month.
Baker said the company “has been fairly cooperative” and that it agreed to pay the $616,165 settlement. It isn’t clear how much, if any, of that money will actually make it back to defrauded consumers, as it isn’t clear how many there are.
“Unfortunately there are some indications that JDI isn’t alone,” he added. “Industry insiders say this is a problem more generally.”
Contacted via their website, JDI Dating didn’t respond to a request for comment on this story.
Listing image by Federal Trade Commission