A Match Group, Inc. stockholder claims in a proposed class action lawsuit that the online dating services company and its CEO and CFO failed to disclose to investors a slew of unlawful activities, including that Match had reportedly defrauded potential customers with “fake” love interest ads, failed to resolve disputed charges, and implemented an intentionally confusing subscription cancellation process.
According to the case, the alleged misconduct came to light on September 25, 2019, when an announcement that the Federal Trade Commission (FTC) was suing Match Group caused the company’s stock prices to fall nearly 2 percent.
The case alleges that throughout the class period, which began on August 6, 2019, the defendants repeatedly touted the success and positive financial outlook of Match Group, the entity behind online dating services such as Tinder, Match, PlentyOfFish, Meetic, OkCupid, OurTime, and Hingle. What the defendants allegedly failed to disclose was that the increase in subscribers to these platforms was fueled in part by Match’s unlawful practice of sending artificial love interest ads to potential customers.
According to the case, many of the “You caught his eye notices” emailed to prospective Match.com users were triggered by accounts the company knew to be fraudulent. When an individual signed up for a subscription based on a fraudulent ad, he or she was either placed in contact with a scammer or, if Match completed its review process before that, was told that the profile was “unavailable,” the case says.
“In either event, the consumer was left with a paid subscription to Match.com, as a result of a false advertisement,” the FTC stated in its complaint.
The lawsuit alleges that Match Group’s subscription numbers were further bolstered by the company’s purportedly “confusing” online cancellation process. According to the FTC:
“Each step of the online cancellation process—from the password entry to the retention offer to the final survey pages—confused and frustrated consumers and ultimately prevented many consumers from canceling their Match.com subscriptions, the FTC contends. The complaint states that Match’s own employees described the cancellation process as ‘hard to find, tedious, and confusing’ and noted that ‘members often think they’ve cancelled when they have not and end up with unwanted renewals.’”
The plaintiff in the case claims the defendants’ purportedly unlawful activities were concealed from investors until September 25, 2019, when the FTC announced its action against Match. Upon this news, Match Group’s stock price reportedly fell $1.49 per share on “unusually high trading volume.”