Launching a dating website from scratch can be a challenge. The question is how do you build up a sufficient database of single individuals to make the site viable? Dating sites approach this issue differently, but the temptation to create and use fake profiles is rife with risk as JDI Dating learned in a recent FTC enforcement action.
Chicken and Egg
Assume you are single and see an ad for an interesting looking dating site while browsing the web. You click onto the site and find out there are only two hundred other people using the site with the closest one 250 miles away from you. Are you likely to continue using the site or become a paying member? Probably not.
This profile population issue is a familiar conundrum faced by new dating sites. How do you populate the site sufficiently to get new visitors to join and come back? More importantly, how do you convince visitors to fork over their credit card to become a paying member?
The answer for most sites involves a two-step process. Step one is to advertise to attract traffic. Step two is to provide completely free accounts to the first 100,000 users. This process creates a sufficient population of members that most people will be able to find someone in their area when using the site. Once a tipping point is reached, paid options can then be offered to create revenue from the site.
There is also a third strategy for building up the profile population of a dating site – create fake profiles. A new dating site can either try to scrape profiles off a more established dating website or hire freelancers to sit around and create new fake profiles. Are there legal concerns with these approaches? Absolutely. The FTC considers the use of fake profiles to constitute deceptive consumer practices.
JDI Dating runs a number of dating websites. The FTC alleged the company created computer generated “virtual cupids” for the sites. These virtual cupids looked exactly like standard member listings with full profiles and photos of the imaginary person, but also contained a small “VC” symbol on the page. According to the terms and conditions of the sites, the “VC” meant the profile in question was not a real person. Put another way, the profiles were “fake.”
As with many dating sites, the JDI sites allowed people to become members for free. To communicate with other members, however, one had to convert to a paid membership. The FTC alleged JDI Dating deceived free members into becoming paying customers by sending them “winks” from virtual cupids – accounts that were fake – implying there was a real man or woman interested in the free member.
JDI Dating was then alleged to “play funny with the money” using negative billing options to charge individuals excessively. Negative option billing refers to the practice of automatically signing up members for a number of services without their explicit consent. The members are then charged each month until they affirmatively cancel each service. This form of billing violates the Restore Online Shopper’s Confidence Act.
So, what did all of this cost JDI Dating? The company settled with the FTC for more than $600,000 and most likely paid tens of thousands more in legal fees. The company also agreed to terminate a number of its practices.
Dating sites spawn a significant number of lawsuits. The temptation to create fake profiles can be overwhelming when launching a new dating site. Don’t fall for it and certainly don’t use the profiles to entice members to convert from free to paid memberships. The short-term benefit is outweighed by the long-term legal ramifications.
Richard A. Chapo, Esq.