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.

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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

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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?15. 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

65dating websites analysed in Sept 2014

Handling complaints

Easy to complain about dating site service quality

Easy to report would-be scammers or suspicious activity

86% 23%

Scam warning messages

Displays scam warning messages

Scam warning messages are prominent Scam warning messages meet industry best practice1

61% 54% 23%

Personal info & privacy

Discloses how personal information is used in a privacy policy

Provides an easy `opt-out' method from direct marketing

Permits reuse of profile information for other means, including on partner sites

91% 57% 46%

Subscriptions

Allows users to cancel subscriptions online

Provides up-front service costs before users join

89% 2%

LEGEND Good Could do better Not so good

The ACCC analysed 65 dating websites as a part of the International Consumer Protection Enforcement Network global sweep in September 2014.

1 Best practice guidelines for dating websites

Helping you to achieve better results .au/publications

2

Online dating industry report

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