Legal

A Japanese dating site called DEAiBBS was launched in 2005 and were soon advertising that they had about 120,000 members. In 7 years of operation it has been reported that the dating site has earned 2 billion yen ($22.7 million USD). On January 15, 2013 7 people were arrested and charged with fraud relating to DEAiBBS. It has been alleged by the police that 80 percent of the members of DEAiBBS were not real people. 4 of the arrested people were part-time employees whose job it was to create fake profiles and communicate with other members to dupe them to pay and upgrade their memberships.

Over 45 claims have been filed against the dating service which are looking in total for 85 million yen ($965 thousand USD) in damages. Some victims of the fraudulent dating service had lost more than $10,000 USD to the company.

For more on this story you can read the Japan Daily Press.

PayPal has been told by a Judge that they cannot dismiss a lawsuit filed by SeekingArrangement.com. The lawsuit is about PayPal suspending SeekingArrangement.com accounts because of the sexual nature of the dating site. Meanwhile they still allow similar sites like Ashley Madison to have a PayPal account so their members can pay for the dating service.

SeekingArrangement.com started to use PayPal as a payment gateway for their members back in 2007. By 2011 PayPal has suspended their account permanently citing the fact that they allow dating options such as “Intimate Encounter” and “Discreet Affair”.

To find out more about the sugar daddy dating site that is taking on PayPal you can read our SeekingArrangement review.

Online dating: it's great, except when it isn't.

The latest cautionary tale involves Skout, a social networking app designed to link up adults with other users nearby. Skout got its start as a Foursquare-like location check-in service, but didn't hit its stride until it transformed into a location-based flirting app. The company now attracts millions of new users a month and received $22 million in financing from Andreessen Horowitz, a leading venture capital firm in Silicon Valley, earlier this year.

After discovering that minors had gained access to the app, Skout created a service designed specifically for 13- to 17-year olds. Safeguards were put in place, but they may not have been safe enough.

3 men have now been accused of raping children they met through the location-based app. In each case, the men reportedly posed as teenagers in the Skout forum for underage users. In one case, a 15-year-old girl from Ohio said she was raped by a 37-year-old man. In the second, a 24-year-old man is accused of raping a 12-year-old girl in California. In the final case, a 21-year-old man in Wisconsin has been accused of sexually assaulting a 13-year-old boy.

Skout's founder, Christian Wiklund, responded in an interview, saying, "I'm disgusted by what's happened here. One case is too many. When you have three, it looks like a pattern. This is my worst fear." He has decided to suspend the service for minors, who made up a significant portion of Skout's member base, while he works with security experts to put better safeguards in place.

"We're seeing more of these cases," said Lt. Craig Carter of the Escondido Police Department in California. "Parents need to be aware that their kids could be on these Web sites." Many social networking services forbid minors from using them, or separate minors from adult users, but it's nearly impossible to control who ultimately uses the service.

Wiklund has contact law enforcement officials involved in all 3 cases and offered to aid in their investigations. The company has also suspended the app for teenagers and banned all devices registered with the app that belong to minors. Skout is also working with a task force of experts to improve security, age verification, and other company practices.

"I thought we were doing a lot, but obviously we have to do better," says Scott Weiss, an investment partner with Andreessen Horowitz. "This is a five-alarm fire. The entire company is re-evaluating everything it's doing."

Lt. Peter Burks was a troop leader in the 2nd Stryker Cavalry Regiment. He was also the recipient of the Bronze Star, a medal awarded for acts of merit. More recently, Peter appeared as the poster boy for an online dating site, with the headline "Military Men Searching For Love."

That wouldn't be making headlines, were it not for the fact that Peter passed away on November 14, 2007, when a bomb blew up his vehicle as he was returning to base after a mission in Baghdad.

In December, a friend of Peter Burks was surfing PlentyOfFish.com when he spotted the ad. He clicked on it and was directed to True.com, then reported the incident to Burks' parents. His parents are now suing both sites for using their son's photo without their permission, for benefiting financially from its use, and for misleading the public.

His father, Alan Burks, said the photo was taken just days before his son was killed, at only 26 years old, in late 2007. It now appears on the website of the Burks family's Unsung Hero Fund, which celebrates the life of their son by providing supplies to troops in war zones. "I felt horrified, disgusted. It upset me," said Alan of the photo. The assumption that Peter was using online dating sites to meet women "couldn't be more wrong," Alan continued, as Peter was happily engaged at the time of his death.

Plenty Of Fish has responded to the scandal through spokesman Paul Bloudoff, who claims that the company had no advertisements online in the U.S. in December. Hundreds of thousands of third parties advertise via his company's site every month, he noted, making it impossible for Plenty Of Fish to control the ads or be aware of their content. The ad has now been blocked from the company's network, though Bloudoff believes the suit should not have been filed. "We dealt with this matter a month ago," he said in an email.

True.com president Ruben Buell has shown a little more sympathy for the Burks. "I certainly feel for his family," he said, adding that he hasn't seen the lawsuit but "will be researching this diligently."

The suit was filed last month in state district court in Dallas, TX, seeking a jury trial for compensatory and punitive damages. Alan Burks plans to donate any money awarded in the suit to military charities. "For me, this is making sure that the honor and legacy of Peter is protected," he said.

Santa Monica City Council is preparing to lift a ban from 1954 that prohibits:

... personal introductory service, marriage bureau, lonely hearts club, or other business of a like nature from operating within the city limits ...

This means online dating websites can now operate along with matchmaking services, but escort services would still not be allowed in Santa Monica. The newly allowed businesses would still require a police permit and criminal background checks though.

The UK dating company Easydate shares rose roughly 13 percent to 102.5p in September on news that profit increased to almost £2m from revenues of £8.8m for the first half of 2010. For the whole of 2009 revenue for the company was £8.5m with profits of just under £1m. Easydate is now valued at £77m. This is £32m more than when it first listed on June 30th of this year.

Easydate currently runs Cupid.com in the United Kingdom and Europe. They now will be taking charge of the US and Canada operations for Cupid.com in a £4.4m deal. This increases Easydate's holding of dating sites in North America to three.

Easydate may also be in a bit of legal trouble. easyGroup has threatened action against Easydate over alleged trademark infringement. easyGroup currently licenses the name "easy" to a number of companies. This includes easyCar, easyHotel and easyJet. easyGroup claims Easydate was trying to use their brand recognition and pass off as one of their own.

To find out more about the dating site mentioned in this story, read our review of Cupid.com.