Online dating industry report

ACCC report

Online dating industry report

A report on the ACCC¡¯s participation in the 16th International

Consumer Protection Enforcement Network (ICPEN) internet sweep

February 2015

The ACCC¡¯s 2014 internet

sweep focused on the online

dating industry in recognition

that dating and romance scams

account for over 30 per cent of

total financial losses reported

to the ACCC as arising from

scams activity.

.au

ISBN 978 1 922145 44 4

Australian Competition and Consumer Commission

23 Marcus Clarke Street, Canberra, Australian Capital Territory, 2601

? Commonwealth of Australia 2015

This work is copyright. In addition to any use permitted under the Copyright Act 1968, all material contained within this work is provided under a Creative

Commons Attribution 3.0 Australia licence, with the exception of:

? the Commonwealth Coat of Arms

? the ACCC and AER logos

? any illustration, diagram, photograph or graphic over which the Australian Competition and Consumer Commission does not hold copyright, but which

may be part of or contained within this publication.

The details of the relevant licence conditions are available on the Creative Commons website, as is the full legal code for the CC BY 3.0 AU licence.

Requests and inquiries concerning reproduction and rights should be addressed to the Director, Corporate Communications, ACCC, GPO Box 3131,

Canberra ACT 2601, or publishing.unit@.au.

Important notice

The information in this publication is for general guidance only. It does not constitute legal or other professional advice, and should not be relied on as a

statement of the law in any jurisdiction. Because it is intended only as a general guide, it may contain generalisations. You should obtain professional advice

if you have any specific concern.

The ACCC has made every reasonable effort to provide current and accurate information, but it does not make any guarantees regarding the accuracy,

currency or completeness of that information.

Parties who wish to republish or otherwise use the information in this publication must check this information for currency and accuracy prior to

publication. This should be done prior to each publication edition, as ACCC guidance and relevant transitional legislation frequently change. Any queries

parties have should be addressed to the Director, Corporate Communications, ACCC, GPO Box 3131, Canberra ACT 2601, or publishing.unit@.au.

ACCC 02/15_927

.au

Contents

Introduction

1

High level overview

2

Compliance with Best Practice Guidelines

3

Scam warning information

3

Complaint reporting mechanisms

3

Best Practice Guidelines compliance

4

Potential issues arising under the Australian Consumer Law

4

Automatic subscription renewals

4

Unfair termination provisions (unfair contract terms)

5

Pricing disclosure

6

Privacy policies and use of personal information

7

Fake profiles

8

Next steps

8

Introduction

On 15 September 2014 the Australian Competition and Consumer Commission (ACCC) participated in the

annual International Consumer Protection Enforcement Network (ICPEN) Internet Sweep.1 More than 50

consumer protection agencies from around the world were involved. The ACCC reviewed 65 online dating

websites for compliance with:

(a) the ACCC¡¯s Best Practice Guidelines (the guidelines) for dating websites, and

(b) the Australian Consumer Law (ACL).

This report details findings from the internet sweep.

Online dating has become a popular service industry in Australia comprised of both Australian and

overseas companies.

IBISWorld¡¯s Dating services in Australia industry report projects revenue for online dating services to

reach $113.3 million in 2014¨C15. No official data is available on the number of Australians using these

services but major industry participants claim membership numbers in Australia that total in excess of 4.6

million. Given that consumers may register on multiple dating sites, it is likely these numbers include some

double counting.

The market is comprised of both Australian and overseas companies, with 31 (48 per cent) of the

65 websites swept being Australian-based and the remaining websites also offering services for

Australian consumers.

Dating and romance scams account for over 30 per cent of total reported scam losses to the ACCC, with

over $27 million reported lost to this scam type in 2014. Additionally, the rate of those reporting losses to

dating scams is the highest of any scam category.2 These figures reflect similar findings in previous years

and support the ACCC¡¯s decision to continue working with the online dating industry to prevent and disrupt

scam activity.

The ACCC previously worked with the online dating industry to develop the guidelines which were launched

in 2012. The guidelines aim to help dating website operators respond to scams targeting their users and they

cover three key areas:

?

the inclusion of appropriate scam warnings and information on websites

?

establishing vetting and checking systems to detect and deal with scammers

?

making available to consumers a scam complaint handling mechanism.

Given the nature of the sweep, it was only possible to test for compliance with the public facing aspects of

the guidelines and no assessment was made of whether scam vetting or checking systems were in place.

The internet sweep provided an opportunity to examine the extent to which the guidelines have been

adopted and identified opportunities to work further with the industry on disrupting scams.

Analysis of the internet sweep results has identified a number of issues that could be addressed through

enhancements to the guidelines. These findings are presented below.

1

The ICPEN Sweep is in its 16th year. ICPEN is made up of consumer protection authorities from over 50 countries and its main objective is

to: protect consumers¡¯ interests around the world, share information about cross-border commercial activities that may affect consumer

welfare, and encourage global cooperation among law enforcement agencies. For further information, see the ICPEN website.

2

Reported loss rates measure the number of SCAMwatch reports that actually report losses as a percentage of total reports for a particular

scam category. Reported losses for dating and romance scams were 41 per cent in 2014 as opposed to an average reported loss rate across

all scams of fewer than 12 per cent.

1

Online dating industry report

High level overview

The following graphic gives a broad overview of the findings from the internet sweep.

Dating websites report card

ª¦

65

dating

websites

analysed in Sept 2014

Handling complaints

Easy to complain about dating site

service quality

86%

Easy to report would-be scammers or

suspicious activity

23%

Scam warning messages

Displays scam warning messages

61%

Scam warning messages are prominent

54%

Scam warning messages meet

industry best practice1

23%

Personal info & privacy

Discloses how personal information

is used in a privacy policy

91%

Provides an easy ¡®opt-out¡¯ method

from direct marketing

57%

Permits reuse of profile information for

other means, including on partner sites

46%

Subscriptions

Allows users to cancel subscriptions

online

Provides up-front service costs

before users join

LEGEND

89%

2%

The ACCC analysed 65 dating websites as a part of

the International Consumer Protection Enforcement

Network global sweep in September 2014.

Good

1

Could do better

Not so good

2

Best practice guidelines

for dating websites



Helping you to achieve better results

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Online dating industry report

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