Tinder Owner Match Falls on U.S. Claim of Fake Love Interest Ads

(Bloomberg) -- Match Group Inc. fell after the U.S. Federal Trade Commission accused the world’s biggest provider of online dating sites of tricking consumers into paying for subscriptions.

Match.com exploited messages from fraudulent accounts to induce non-subscribers to sign up for subscriptions, the FTC said in a lawsuit filed Wednesday against the company.

“Online dating services obviously shouldn’t be using romance scammers as a way to fatten their bottom line,” said Andrew Smith, the head of the agency’s consumer protection bureau.

Match called the FTC’s claims “baseless” and said it blocks 96% of bots and fake accounts from its site.

“The FTC has misrepresented internal emails and relied on cherry-picked data to make outrageous claims and we intend to vigorously defend ourselves against these claims in court,” the company said in a statement.

Match, which owns dating sites including Tinder, fell as much as 8.6% on the news before recovering some of its losses. The stock was down 1.2% to $71.61 at 3 p.m. in New York.

Match is owned by billionaire Barry Diller’s IAC/InterActiveCorp. Since going public in 2015, Match has quadrupled its market capitalization, largely driven by explosive growth in Tinder, the dating app people use to swipe right on photos of prospective dates to indicate romantic interest.

The Dallas-based company runs about 45 different dating brands such as OkCupid, Hinge, Plenty of Fish and Match.com, but subscription growth in these products has paled in comparison to Tinder.

According to the FTC, when non-subscribers with free accounts received likes, favorites, emails, and instant messages on Match.com, they also received emailed ads from Match encouraging them to subscribe to view the identity of the sender and the content of the communication.

Many consumers bought subscriptions because of the ads, but instead of a real user, it was often a scammer on the other end, the FTC said. Match knew those communications were sent by users likely engaging in fraud, according to the agency.

The FTC’s allegations were about the company’s Match.com site and not other dating properties.

Match’s own analysis found that consumers purchased almost 500,000 subscriptions within 24 hours of receiving an ad related to a fraudulent communication from June 2016 to May 2018, the FTC said.

--With assistance from Olivia Carville.

To contact the reporter on this story: David McLaughlin in Washington at dmclaughlin9@bloomberg.net

To contact the editors responsible for this story: Sara Forden at sforden@bloomberg.net, Mark Niquette

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