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- Match Group stock tumbled as much as 9% after the Federal Trade Commission announced a lawsuit alleging the company used fake love-interest ads to lure consumers into buying subscriptions.
- The agency also accused Tinder's parent company of unfairly exposing customers to risk of fraud, and issuing "false promises of 'guarantees'" for subscribers.
- Consumers purchasing Match.com subscriptions "generally were unaware" that as many as 25% to 30% of members were using the platform for scams, the FTC said Wednesday.
- Watch Match trade live here.
Tinder-parent Match Group plummeted as much as 9% on Wednesday after the Federal Trade Commission announced a lawsuit alleging the company used false love-interest ads to trick people into purchasing subscriptions.
The agency also accused the company of unfairly exposing customers to risk of fraud. It highlights "false promises of 'guarantees'" for subscribers, and a failure to provide reimbursements for those disputing charges.
"We believe that Match.com conned people into paying for subscriptions via messages the company knew were from scammers," Bureau of Consumer Protection director Andrew Smith said.
"We believe that Match.com conned people into paying for subscriptions via messages the company knew were from scammers."
Consumers purchasing subscriptions on Match.com "generally were unaware that as many as 25 to 30 percent of Match.com members" were using the platform for scams and fraudulent advertising, the agency's statement said.
Match surged early August after the company trounced analysts' earnings expectations and touted a 37% year-over-year growth in Tinder subscribers. The company also announced an investment in Egypt-based dating app Harmonica in a bid to further its global expansion.
Match traded at $70.89 as of 2:23 p.m. ET Wednesday, up about 65% year-to-date.
The company has eight "buy" ratings, 14 "hold" ratings, and one "sell" rating from analysts, with a consensus price target of $90.50, according to Bloomberg data.
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