WASHINGTON — JDI Dating, which operates 18 dating sites, yesterday reached a settlement with the Federal Trade Commission that prohibits the use of bogus profiles.
The U.K.-based company, as well as company founder William Mark Thomas, also agreed not to charge phony monthly fees that consumers didn't agree to and was required to pay $616,165 in refunds to consumers.
It's the first enforcement action against an online dating service by the FTC.
JDI's dating sites was said to have made fake profiles, which it called "virtual cupids," and have them send computer-generated messages to new users who had created profiles but hadn't yet paid.
Users later received an email on the dating sites that notified them that another user sent them a "wink" within minutes of joining. Additional winks, messages and photo requests from other members in their geographic area followed. The only indication that the profile was fake was a miniscule logo with the letters V and C.
JDI, however, did disclose consumers about the virtual cupids in its "terms and conditions," but that wasn't good enough for the FTC.
The FTC noted those weren't displayed to consumers before consumers enrolled; further, the regulator said, the terms page also didn't explain how to identify the virtual cupids.
"The messages were almost always from fake, computer-generated profiles -- 'Virtual Cupids' -- created by the defendants, with photos and information designed to closely mimic the profiles of real people," the FTC said.
While the FTC called that practice "deceptive," it also went after the company for not making clear that it clear to consumers that it would hit customers with recurring charges on their credit cards.
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.
Under terms of the settlement, in addition to the $616,165 in restitution, JDI agreed to no longer use phony profiles without disclosing the practice and to be up-front regarding billing and cancellation policies.
Adult entertainment industry attorney Lawrence Walters represented JDI Dating and Thomas in the case.
"Contrary to some reporting, JDI never admitted to any of the wrongdoing alleged by the FTC, but was happy to reach a resolution to the claims that was acceptable to all parties," Walters told XBIZ.