Match Group, Inc. and Match Group, LLC, the operators of major online dating services including Match.com, OkCupid, PlentyOfFish, and The League, have entered into a settlement with the Federal Trade Commission (FTC) to resolve allegations of deceptive advertising, unfair billing practices, and obstructive cancellation procedures associated with their subscription offerings.
The stipulated final order, recently filed and approved by the U.S. District Court for the Northern District of Texas, requires Match Group to pay $14 million for consumer redress and to permanently reform its subscription and advertising practices.
Background of FTC Allegations
The FTC’s September 2019 complaint detailed several alleged violations:
- Deceptive Guarantees: Match.com advertised a “free six-month subscription if you don’t meet someone special” without clearly disclosing the restrictive conditions users had to meet to qualify for the offer.
- Retaliatory Account Suspension: Users who disputed billing charges were allegedly locked out of their paid-for accounts, effectively depriving them of the services despite payment.
- Complicated Cancellation Procedures: Consumers reportedly faced undue hardship in canceling Match.com subscriptions.
Key Terms of the Settlement Order
The final order imposes several permanent requirements aimed at protecting consumers and ensuring transparency in the subscription process:
- $14 Million Consumer Redress Fund: The settlement payment will be administered by the FTC to compensate affected subscribers.
- Clear Guarantee Disclosures: Match must plainly and conspicuously disclose all terms, restrictions, limitations, and conditions of its six-month guarantee and any other offers.
- No Material Misrepresentations: The company is permanently barred from misrepresenting any aspect of its guarantees or related material conditions.
- No Retaliation for Billing Disputes: Match must not retaliate against users for disputing charges, including by suspending accounts or denying access to paid services.
- Simplified Cancellation: The order requires the company to provide straightforward, easy-to-use mechanisms for subscribers to cancel services.
Practical Implications for Online Subscription Businesses
This enforcement action signals enhanced scrutiny by the FTC of deceptive advertising, unfair billing, and complicated cancellation practices across the digital subscription industry. Subscription-based businesses, particularly those using promotional guarantees or auto-renewal billing, should:
- Review Guarantee Promotions: Ensure all terms and conditions are direct, prominent, and understandable.
- Reform Billing Dispute Protocols: Avoid punitive measures against customers initiating billing disputes.
- Streamline Cancellation Processes: Make subscription cancellation fast, simple, and transparent for all users.
- Conduct Compliance Assessments: Periodically audit practices for conformity with FTC regulations and consent orders.
Next Steps
Online service and subscription-based businesses should review their advertising, billing dispute, and cancellation practices in light of this development, and update compliance protocols as needed to reduce legal risk.
For more details or a compliance audit, please contact your Relationship Partner or Susan Duarte at sfd@commlawgroup.com