Five years ago, when the Federal Trade Commission launched an investigation into issues related to romance scams, analysts from the consumer watchdog agency got their hands on internal data from Match.com, a major player in the online dating world.
A former FTC analyst, who requested anonymity due to ongoing aspects of the case, described the findings as "incredibly troubling."
The results of the investigation were included in the government's 2019 lawsuit against Match Group, the parent company of Match.com. The lawsuit alleged that "between 2013 and at least mid-2018," consumers looking to buy a Match.com subscription were often unaware that up to 25-30 percent of daily registrants on the site were using it for fraudulent activities.
Match Group responded to CBS News, stating that it believes the FTC's allegations are baseless. However, cybersecurity experts point out that this accusation sheds light on a persistent challenge faced by not only Match Group but also social media platforms and online dating apps nationwide: How to strike a balance between maintaining an accessible environment for users to join and implementing screening measures to prevent sophisticated scams by overseas perpetrators.
"Ensuring safety is essential to our operations," stated Match Group CEO Bernard Kim in an interview with CBS News.
The corporation has reported significant advancements in deterring scammers from accessing its platform. When questioned by CBS News, Match Group highlighted their "ongoing investments — in order to prevent, monitor, and eliminate individuals who breach our guidelines." These efforts encompass both automated and manual scans for concerning language and images, as well as suspicious profiles. Match Group claims that these measures result in the removal of 96% of "potentially inappropriate accounts" within a day. The company disclosed to CBS News that it consistently allocates $125 million annually towards trust and safety, with the team expanding by 30% in the last year.
Despite these measures, there is tangible proof that the initiatives aimed at safeguarding online daters have not effectively curbed criminal activities. In the half-decade following the FTC's legal action, a surge in romance scams has inundated the country, leading to American victims losing over $1 billion to foreign criminals in 2023 — a figure that is likely higher due to underreporting, as per law enforcement officials.
"This is a significant issue that is rapidly escalating," remarked Arun Rao, deputy assistant attorney general for the Department of Justice's Consumer Protection Branch.
Insights on Romance Scams in Online Dating
Having investigated numerous romance scam cases, retired U.S. Postal Inspector Natalie Reda highlighted the complexity of the issue. While online dating companies like Match Group collaborate with law enforcement and hire former agents to bolster security measures, Reda emphasized that scammers still target vulnerable individuals on dating apps.
Reda acknowledged the efforts made by these companies, such as implementing facial recognition technology and warning systems on their platforms. Despite these preventive measures, she noted that scammers continue to exploit dating apps as their primary "hunting grounds" for potential victims.
One tragic example is Laura Kowal, a widow from Illinois who fell victim to a romance scam on Match.com. Kowal, who encountered a man posing as an investment executive named Frank Borg, ended up sending $1.5 million to the scammer before tragically passing away in 2020. The circumstances of her death, whether accidental or intentional, remain unclear.
Upon being alerted by federal authorities about the fraudulent profile, Match Group promptly removed the "Frank Borg" account. However, the company did not disclose the duration of the profile's existence on their platform or the number of users who interacted with the fake persona.
The "F-word"
Just how much companies like Match Group have done to protect customers is a matter of disagreement in both law enforcement circles and among online security experts. Three former Match Group executives who spoke with CBS News about their experiences at the company described an uphill battle to protect customers. All three spoke on the condition they not be named.
"It wasn't a real priority backed up by resources," said one security expert who recently left a senior position at Match Group, when asked about efforts to root out scammers on their apps.
Kathryn Kosmides agreed. Kosmides runs a nonprofit called Garbo, which partnered with Match Group in 2021 to help improve security. In a press release announcing their collaboration, the company called her technology "thoughtful and groundbreaking." She described the experience as dispiriting.
"They don't want friction on these apps," Kosmides said, explaining that "friction" is anything that makes it harder for people to sign up for a dating app. In the industry, she said, friction is "the F-word."
Match Group claims that's false and said in a statement that, in fact, it employs a muscular regime to screen new users.
The company, which operates dozens of popular dating apps including Tinder, Hinge, and The League, is the largest player in online dating. But scammers also have exploited other mainstream social media sites to search for potential victims. Kosmides said the reluctance to spend money on what tech firms call "trust and safety" is a problem industry-wide.
"After extensive conversations with various online dating platforms, ranging from the largest to the smallest, it is evident that trust and safety are not prioritized due to lack of revenue," stated Kosmides.
Law enforcement authorities have emphasized the crucial role that companies must play in combating the proliferation of romance and other types of scams.
"It is imperative for tech companies and financial institutions to take proactive measures in preventing the exploitation of American citizens," asserted James C. Barnacle, Jr., who supervises the financial crimes division at the FBI.
"Deserving of Legal Protection"
The Federal Trade Commission is one of the key government agencies responsible for safeguarding consumers against fraudulent activities.
In 2019, the FTC initiated a legal action against the parent company of Match.com in a federal court in Texas. The lawsuit alleged that the company had not adequately screened fraudulent accounts on its platform and had exposed non-paying users to messages from accounts flagged as potential scammers.
In response, Match Group defended itself in court documents, acknowledging that some users may join the platform with malicious intent. However, the company claimed to go to great lengths and expenses to prevent such users from accessing the platform and to safeguard genuine subscribers and non-subscribers.
The company responded to the accusations made by the FTC by releasing a statement online, claiming that the FTC had used selective data to support their claims. The company stated that they would defend themselves vigorously in court against these allegations.
The legal case has been progressing slowly. U.S. District Judge Ed Kincaid rejected the FTC's attempt to present over 100 pages of customer complaints, arguing that they were hearsay as they had been provided to the Better Business Bureau. Additionally, a portion of the government's case was dismissed after the company cited protection under Section 230 of the Communications Decency Act, which shields online platforms like Match.com from liability for actions of third parties on their site. Judge Kincaid ruled in favor of Match, stating that they were entitled to immunity.
A Legislative Initiative in Congress
Efforts have been made in Congress to hold dating sites accountable for user safety. U.S. Representative Brittany Pettersen, a Democrat from Colorado, expressed frustration with tech companies using federal immunity provisions to evade responsibility for issues like scammers on dating platforms.
Pettersen, along with co-authors, has introduced a bill that would mandate dating apps to alert users when they have been contacted by known scammers.
She believes implementing this measure is a matter of common sense to safeguard users of dating apps. The bill has garnered bipartisan support and has successfully passed through the committee in the House. However, its approval remains uncertain.
"When you're going up against powerful special interests," she remarked, "there is significant financial backing involved. If these companies oppose the bill, their influence can be substantial."
Records from Congress show that Match.com's parent company has allocated $9 million towards lobbying expenses in the past five years. When questioned about Match's stance on Petterson's bill, a spokesperson for the company mentioned that their team is engaged in "productive discussions" with lawmakers and has previously supported similar legislation at the state level.
"Life is unpredictable"
Match Group recently recruited Yoel Roth, the former head of security at the company formerly known as Twitter, in an effort to address the issue. In an interview with Wired, Roth expressed his intention to enhance the company's response to fraudulent activities reported by customers and collaborate with other online dating platforms to find solutions.
"I strongly believe that the trust and safety sector, collectively, should approach these challenges as shared issues rather than individual problems handled in isolation by each company," Roth conveyed to Wired.
The announcement of Roth's hiring coincided with a CBS News interview with Match Group CEO Bernard Kim, who was preparing for a public event. During the interview, Kim defended the company's track record, emphasizing their significant investments in trust and safety. He stated, "It is the first and foremost top priority for us as an organization."
"If you look at our investment over the last few years, we have consistently increased the number of talented individuals and leaders dedicated to this area," Kim added.
When questioned about how Match Group would address customers who had fallen victim to scams, including cases involving the loss of life savings, Kim expressed deep empathy for the affected individuals.
"Look, I mean, things happen in life. That's really difficult," he acknowledged. "But I mean, our job is to keep people safe on our platforms. That is the most important thing to us."
If you or someone you know has been affected by a romance scam, please share your story with us at [email protected]
