Antitrust Law Daily FTC sues Match.com over alleged fraudulent scheme to increase subscriptions
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Wednesday, September 25, 2019

FTC sues Match.com over alleged fraudulent scheme to increase subscriptions

By Robert B. Barnett Jr., J.D.

From June 2016 to May 2018, 499,691 consumers purchased a subscription within 24 hours of receiving an advertising with a fraudulent communication. Match says agency made "completely meritless allegations."

The FTC has sued Match Group, the owner of several online dating sites, in the federal district court in Dallas, alleging that Match Group used fake lover interest advertisements to trick hundreds of thousands of consumers into purchasing paid subscriptions to Match.com, it announced. The agency’s complaint alleges that Match Group (1) sent consumers ads from persons they were told were interested in establishing a dating relationship but who were really fraudulent users of Match.com looking to scam actual users; (2) exposed the consumers to potential fraud by people that Match.com knew were engaged in fraud; (3) guaranteed consumers a free six-month subscription if they failed to meet someone special without adequately disclosing the terms of the "guarantee;" (4) misled consumers with a confusing and cumbersome cancellation process that caused consumers to believe that they had cancelled when they had not; and (5) denied consumers access to services for which they had paid if they disputed charges related to any of these practices (FTC v. Match Group, Inc., September 25, 2019).

Although a consumer can create a Match.com profile free of charge, the consumer cannot respond to messages from someone reporting an interest unless the consumer upgrades to a paid subscription. When the unsubscribed consumer with the free account would receive a like, a favorite, an email, or an instant message, Match.com would email the consumer ads encouraging him or her to subscribe in order to see the identity of the sender and read the contents of the communication. In many cases, however, after the consumer would subscribe to Match.com to see the communication, the communication would be not from someone genuinely interested but rather from a scammer looking to dupe the consumer with fake professions of interest. In addition, the FTC has alleged, Match.com knew that the interested party was frequently a scammer. In fact, it would shield its paid customers from those same potentially fraudulent communications.

Scammers create fake profiles, often seeking to establish trusting relationships that they hope will give them the opportunity to dupe the other party out of money, according to the complaint. As high as 25% to 30% of new registrations each day are scammers, whose schemes include romance scams, phishing schemes, fraudulent advertising, and extortion. Between 2013 and 2016, more than half of all instant messages and favorites were fraudulent. From June 2016 to May 2018, Match.com’s own analysis found that 499,691 consumers purchased a subscription within 24 hours of receiving an advertising with a fraudulent communication. In 2018, romance scams ranked number one on the FTC’s list of total reported losses to fraud.

The FTC also alleged that Match.com failed to disclose all the hoops that consumers had to jump through in order to qualify for the free six-month subscription if they did not meet someone special. For example, Match.com never told consumers that, in order to qualify, they had to message at least five unique Match.com subscribers per month. As a result, consumers who did not meet all the extra criteria were billed for six months of service that they believed was part of their free six-month period.

If anyone complained, the FTC contends, Match.com would ban them from using the services that they had paid for. In addition, Match.com allegedly violated the Restore Online Shoppers’ Confidence Act by failing to provide a simple method for stopping recurring charges or cancelling the service. According to the complaint, Match.com employees have described the cancellation process as "hard to find, tedious, and confusing."

The FTC is seeking monetary damages and a permanent injunction from future violations.

Response from Match. In a statement released today, Match Group said that the agency made "completely meritless allegations supported by consciously misleading figures." The company noted that attempts at a settlement in 2018, "mandating certain changes in the company's business practices, as well as a payment in the amount of $60 million," had failed.

Match Group is the company behind Tinder, Hinge, Match, PlentyOfFish, Meetic, OkCupid, OurTime, and Pairs, as well as a number of other brands.

The case is No. 3-19-cv-02281-K.

Companies: Match Group, Inc.

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