How’s this for a profile on a dating site? “Enjoys travel, long walks on the beach, fake potential dates that really are subscription solicitations, and illegal negative option programs, in violation of the Restore Online Shoppers’ Confidence Act (ROSCA).” If that’s your idea of a dream date, have we got a site for you!
No, the FTC isn’t playing matchmaker, but we are settling a law enforcement action against UK-based JDI Dating. JDI operates a dating site that lets users set up profiles with photos and personal information. With a free membership, people can view profiles, but their ability to communicate with members is limited. To send a personalized message, view a picture at full size, or read certain messages, they have to upgrade to a paid subscription.
Soon after joining as either a paying or free member, people started to get email notifications that another user had sent them a “wink.” They were led to believe the wink was from an “interested single” in their area, but non-paying members first had to buy a subscription if they wanted to communicate with them.
Just who were these flirtatious daters? JDI called them “Virtual Cupids,” but we have another name for them: fakes. Their profiles looked genuine, complete with photos and personal information, but the messages they sent were just computer-generated communications from JDI. The only way a trained eye could distinguish the real deal from the phony baloney was by the presence of a darn near microscopic “VC” Virtual Cupid logo. (We've added an arrow on the right to point out the logo.) The only explanation of the logo’s significance was buried in a terms and conditions page. So don't get too interested in the "curvy" and "easygoing" HeidiHi from Arlington Heights who loves sporting events and spending time with her family. She's one of JDI's fakes.
But that’s not all. When aiming his arrow on the JDI site, Cupid’s primary target was consumers' credit cards, not their hearts – because once people paid to subscribe, the company signed them up for a negative option, often billing them without their consent for additional subscription periods. The only place where that was revealed was in a dense block of text on the terms and conditions page.
When people tried to stop the recurring charges, JDI played hard to get. According to the FTC, the company often failed to honor cancellation requests, responded with questions about why the person wanted to cancel, or even said they would cancel, but continued to bill them.
The complaint charges that those undisclosed “Virtual Cupids” were deceptive, as was JDI’s failure to adequately disclose that it renewed people automatically. According to the FTC, the company’s practices also violated ROSCA, which bans online negative option features unless the seller:
- clearly and conspicuously discloses all materials terms of the deal before obtaining a consumer’s billing information;
- gets the consumer’s express informed consent before making the charge; and
- provides a simple mechanism for stopping recurring charges.
As FTC watchers know, this ROSCA action follows close on the heels of the first ever FTC ROSCA case announced last week. As part of the settlement, JDI will implement far-reaching changes to how it does business and will pay a judgment of $616,165.
What’s the message for marketers? Show ROSCA some love by reviewing your practices – because the FTC ❤ companies that comply with the law.