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FTC: Online Dating Site to Pay $616K for Fake Profiles

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By Mark Wilson, Esq. on November 03, 2014 10:00 AM

It used to be that, on the Internet, no one knew you were a dog. Now, though, the feds know that you're not a real person. See what a difference surveillance makes?

The Federal Trade Commission proposed fining JDI Dating, operator of several different dating websites, $616,000 for sending fake messages to members, ostensibly from people who wanted to meet them. But really, no one wanted to meet them. (Well, maybe someone did, but not the fake people who messaged them.)

Hey There, Wanna Go Out? That'll Be $19.95

The sole purpose of the fake messages sent from fake profiles, according to the FTC, was to induce users to upgrade to paid memberships because they couldn't view the content of the messages without upgrading. Once they became paid members, their memberships would be automatically renewed until they requested otherwise.

JDI made the mistake of indicating through an esoteric mark -- a small "v" inside a "C" -- that the profile was a "Virtual Cupid"; that is, a fake profile generated by a computer.

Is the EULA on the Rocks?

The FTC noted that JDI's cancelation policy was spelled out in its terms of service, though the Commission criticized it for being "buried in multiple pages of densely worded text that consumers could see only by clicking a 'Terms and Conditions' hyperlink." This is the second time in recent memory that a business has been dinged for the inaccessibility of its terms and conditions. Previously, it was enough that one existed somewhere and the onus was on the consumer to go find it and read it.

But courts and regulators are increasingly becoming frustrated with dense gobbledygook. Indeed, the longer a TOS or EULA (end-user license agreement) is, the less likely a consumer is to read it -- and often, there are very important provisions embedded deep within the document, like a class action waiver or an arbitration clause. "I didn't read the contract" isn't a defense, but should it be in a time when the iTunes TOS comes out to about 100 printed pages? (Sure, the contract to buy a house is longer, but that comes with the benefit of a real estate agent and a 30-day closing period.)

Because the "license" is the model that the Internet and technology runs on, we're reading more contracts than ever before. (FYI: You don't own that copy of Windows you bought; you only own a license to use it.) That didn't happen back in Ye Olde Timey Times when we went to the store and bought physical objects -- if only because it was too expensive or inconvenient to barge into our house and tell us we couldn't use the hammer we just bought to hammer a different company's nails. But that happens routinely these days.

Contract law has liberalized quite a bit over the last 40 years. We may yet see a time when a consumer is forgiven for not reading a long, densely worded agreement.

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