Your online dream date may be scam artist. And the dating service may be knowingly turning a blind eye to the fraud. That's among the accusations in a U.S. Federal Trade Commission (FTC) lawsuit against Match Group, which operates many popular online dating apps,
The FTC suit accuses Match of using misleading advertising, billing, and cancellation policies to convince
Match.com app users to become subscribers. The FTC alleges that
Match.com sent emails to app users alerting them to messages from interested individuals, even though the service already had flagged those accounts as fraudulent. Indeed, the FTC contends that Match knew scammers comprise as much as 30% of
Match.com registrations. Moreover, Match's research confirms that between June 2016 and May 2018, almost 500,000 people signed up for subscriptions to the site within 24 hours of receiving an email associated with a fraudulent account.
Once users had signed up for a six-month subscription, the FTC alleges
Match.com made it difficult for them to cancel the service. That would put
Match.com in violation of the U.S. Restore Online Confidence Act, which requires companies to provide a simple method to stop recurring charges.
According to FTC statistics, U.S. residents reported losing $143 million to romance scams in 2018 — a higher total than for any other type of scam reported to the commission. The median reported loss was $2,600, and it was $10,000 for people over 70.
This story brings to light that online dating businesses cannot be trusted to fully protect subscribers from such scams, nor are they transparent in the way they deal with customers and their concerns. While the outcome of this case is not yet known, online dating services can take several measures to detect and reduce such scams and business practice exploitation.
Mandatory audits of anti-fraud and scamming activities should be required. While Match does have some educational anti-fraud material on its company website, it is not clear how comprehensive the company's approach is. According to this story, Match contends that it has "developed industry-leading tools and [artificial intelligence] that block 96% of bots and fake accounts from our site within a day." The company says it relentlessly pursues malicious accounts.
Companies that operate in fields where quantitative business processes and data are abundant should be able to monitor, audit, and publicly report the results. The latter may be a regulatory measure worth considering by the FTC, at least temporarily when a company has violated standards and laws.
The consequences for deceptive business practices need to be significant. These consequences also should apply to companies that knowingly allow fraud to take place. Penalties such as reimbursement of subscription fees — as the FTC is asking for in this case — are justified.
Match also needs to review and clean up its subscription, billing, and cancellation policies and process. For example, the company could establish a "no questions asked" cancellation and refund policy for an initial period, or provide potential new subscribers with a free trial period with full access to services. The billing and cancellation policy and process should be simplified and publicized, with no hidden additional requirements. Internal auditors would be able to advise on ways to implement these measures.
Measures to ensure market competition may be needed. Match may face negative publicity from this case, which could lead the company to change its business practices. Given that Match is the predominant company in the online dating field, the FTC could consider whether there is sufficient competition in this industry to foster a high ethical standard of business practices and undertake additional regulatory measures.