Fraud vs. Customer Service

by David Evans on December 16, 2005 · 12 comments

in Legal

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The dating site fraud allegation saga continues. Indirectly, they hurt the entire industry. Worst case scenario prediction, they settle out of court with a people duped by a supermodel photo at a time when they were most vulnerable. If it comes to a class-action lawsuit, maybe a few million people get a free month extension on their existing dating site. What does that cost a major dating site? Electricity and bandwidth. 30 days later, we’re back where we started.

Companies that offer background checks have been trying to get dating sites to offer their background check and authentication services to the online dating industry for almost two years now. The industries resistance (costs, integration, fear of being first) has hurt everyone, from other dating sites to, most importantly, the consumer who puts that $20 a month in their coffers.

It could be that all that’s required is a more stringent signup process, including verification, or perhaps dating sites will take a look at social networking to see where they should be headed. Otherwise, the progenitors of Myspace will continue to usurp members at an alarming rate. Soon enough, dating sites may be perceived as virtually indistinguishable from social networking sites.

All dating sites contain a certain number of fake profiles. They are either placed by the service, directly by first-person scammers, or indirectly as in a dating agency scam. How will lawyers identify the origin of “fake” profiles? this is much more difficult than I previously thought.

Dating site A contacts members at the end of their membership cycle via fake profiles, with the goal of extending your membership. Clearly, this is fraud. To be sure, any dating site unethical enough to put up fake profiles or otherwise deceive customers deserves the wrath of Elliot Spitzer. As if consumers weren’t down on online dating already.

Russian dating agency B, which take money from women and posting their photos on dating sites without their knowledge, then demanding exorbitant fees from American men to contact them, clearly is committing fraud.

This type of fraud is incredibly difficult to identify.

Dating site C has scammers directly posting all varieties of fake profiles, and continues to defraud members of the site via various scenarios.

Type B and C scammers will always remain one step of the dating sites. The fraud may occur farther down the timeline, but it always does. Some things will never change.

Dating site D contacts people at the end of their membership extolling the virtues of the service, asking them to stick around, surveying them to find out what went wrong and suggesting solutions that outweigh leaving the service. Not as part of a “We’re sorry to see you go” form letter but a more dynamic form of communication, perhaps in the form on IM’s, emails or even clearly-identified employee profiles (again, acting as community monitors. chat rooms have done this for years.)

Why aren’t they more proactive about keeping their members happy and content? Because until now, no one cared. As long and the burn & churn rate keeps 2k-10k people signing up a day, the site is making money, either from advertising or subscriptions.

At iDate you will find several companies entering the online dating space who are going to force the old guard to change how the run their service and treat customers. New dating sites that take advantage of the new way of dating will have a tremendous effect on the bottom lines of dating sites large and small.

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{ 12 comments… read them below or add one }

markusNo Gravatar 12.16.05 at 2:26 pm
I think the future of dating isn’t social networking but a hybrid like plentyoffish. 3 years ago i tried to add blogging to the site, it failed so i created a moderated community with strict rules. I’ve banned about 200 people out of 1 million+ from the forums after giving them 3 warnings. At any rate major sites have approached me asking how they can impliment forums, and many other 3rd and 4th their sites have just copied my forum rules and actual forums directly.

At the end of the day this is a battle about technology. I’ve introduced technology that makes a dating site containing millions of members run on a budget of 10k/month. Myspace and fakebook have done something similar, although there costs are higher they are still profitable. When we look at history technology always wins in the end, i just can’t see paid dating sites existing in 3 to 4 years from now when plentyoffish is established and so is myspace etc.

The problem with most paid dating sites is you are more likely to be a victum of a attempted scam then you are of meeting someone.

James J.No Gravatar 12.16.05 at 11:04 pm
Markus,

Why do you think that is the case? Logically, one would expect pay sites to be able to do a better job of dealing with scammers than free sites because they can afford to deploy more resources to it. Is it just that most of the large pay sites aren’t trying that hard?

Robert FathersNo Gravatar 12.17.05 at 4:48 am
Two things here which run side by side, is that the majority of sites don’t concentrate enough on their own analytics. If you are lucky enough to be a bigger site and have a larger budget for demographics and analytics then building this into your systems means that you can build up patterns of people, collecting this into your database and than by adding a filtering system, which when operated over a period of time will become self-intelligent - for example on one of our sites singlescrowd we have a full time person involved in this and sets filters and blacklists of members, we hope sometime in the future to share these in the future – wouldn’t it be great if all the large sites could save into a shared database so we can all benefit from it. We also run checks on uncertain profiles, with phone checks and anti fraud systems for the Nigerian scams as well as Russian scammer filters.
We are really happy to share this information with other sites in an exchange program, anyone large site out there want to help us start this; we don’t mind footing the bill for development. Regards Robert Fathers, World-dating-partners– singlescrowd
markusNo Gravatar 12.17.05 at 1:40 pm
Creating block for russians is dead simple, i haven’t had a single russian fake profile for over 7 months. Sites like yahoo, americansingles have them by the tens of thousands. You go to webdate and search in nigera, you get 10’s of thousands of profiles of known scammers.

Just blocking the IP’s from those countries would get rid of 90% of the spam and then more complicated filters would clean up the rest.

I think many of the scammers increase conversion rates and thats why they are left there. For a test i create a new hotmail account and went to Adultfrienfinder and messaged 20 girls.. I got 0 legit replies 2 replies from escorts and 8 replies from various porn spambots for other sites.

adamNo Gravatar 12.17.05 at 7:28 pm
quit hawking your retarded plentyoffish site. it’s the worst dating site, PERIOD.
RAANo Gravatar 12.18.05 at 7:46 pm
James J., you people have always baffled me with your responses about Free dating sites, and how everybody thinks they must be inferior because they’re free.

Look around, free dating sites are owned by computer programmers, and philantropists. I own oasisoflove.com, and I challenge anybody to show me how any paysite is better in quality than what I have to offer.

Yahoo, Match, really screwed up dating online. They should have kept everything honest, and people would have continued to pay up for a long time to come. It’s the dawn of a new day, free dating is taking over. There is nothing that paysites provide that I don’t, with the exception of their millions of members, which we know are mostly fake.

The fact is, there are more spammers/scammers on Match than you’ll find on any other dating site. Why? Match could easily detect scam letters programmatically and prevent delivery. But they won’t, because that’d cut into their membership base, and ultimately their income. It’s all about money, nobody cares about the members’ interest.

Brian O'NeillNo Gravatar 12.19.05 at 6:36 am
I notice these days that match.com does not even tell you who sent you a message unless you suscribe.

I got a message to my match account, but they have stopped telling you who sent it.

This is a very sneaky tactic that I will believe will annoy a lot of users.

The other sites must be really eating into matchs market share.

Brian

David EvansNo Gravatar 12.20.05 at 2:18 pm
Markus, you’re pretty quick to say your site is the way of the future. Since when are you a hybrid? You are a dating site. It says that right on your home page. You have people signed up as monkey’s, stock photos, and I see tons of profiles that border on fake.

Most of us would disagree that paid sites are going away. There may be less casual daters on them, but going away? Never happen. There will always be a core several million people who use price as a filter. This is why Google dating will never really work. Free is nice but you have to put up with so much more. Lame ads, bad UI, crappy profiles, etc.

markusNo Gravatar 12.20.05 at 2:56 pm
I’ve done much different that no other dating site did.

1. Before mine all dating sites had profiles locked away behind a login.

2. I found a way to actually have forums on a site dating site.

3. Thousands of members review and help each other rewrite their profiles every day.

4. Members organize and hold their own parties on a weekly basis. 2 Weekends ago i had a party in ontario that was broadcast live over the radio all night, and nearly 1,000 singles showed up.

That to me is taking parts of what made social networking successful and incorperating it into a dating site model.

Paid dating sites probably won’t go away, but what if 80% of singles start using social networking sites to find dates? Does anyone think the generation being brought up using social networking sites is suddenly going to switch to paid dating sites?

FighterNo Gravatar 01.06.06 at 5:23 pm
This problem is going to grow as more online daters are defrauded, lied to, raped, killed, etc.

Thanks for posting this in contrast to the online dating sites who swear there is NO PROBLEM. And ignore that man behind the green curtain, too.

RAANo Gravatar 01.19.06 at 6:24 pm
marketplusNo Gravatar 03.22.06 at 5:46 pm
“I’ve banned about 200 people out of 1 million+ from the forums after giving them 3 warnings”

Markus, this is complete and total crap! Your public forums have proven to be a place where slander and libel abound. Too many people get banned and deleted from your site without warning or reason (myself included).

I am privvy to someone who reported a case of libel in your forums, and your “solution” was to delete their account … not once, but several times!

You run a successful internet site, but your methods will only serve to snap back agaist you (and your members).

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