Tagged.com gets tagged for big $$$ for misleading 'members' with false contact requests, spamming contact lists
Posted by
zeitgeist
Apr 12 '10, 18:12
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SF district attorney tags Tagged.com with $650,000 settlement
Four months after settling similar cases with New York and Texas, social network Tagged Inc. has agreed to pay the San Francisco District Attorney's office $650,000 for sending millions of illegally "deceptive" e-mail messages in a 2009 campaign to build membership.
The San Francisco company sent 40 million to 60 million e-mail messages from April to June 2009 to prospective members, falsely claiming a friend had sent a photograph or private message, District Attorney Kamala Harris said.
The e-mail "misled" consumers into creating a new membership that also gave Tagged access to their entire contact list, Harris said. Like a "pyramid" scheme, the company then used the newly acquired contacts to send more recruitment messages, Harris said.
Tagged Inc. agreed to pay Harris' office $400,000 in civil penalties and $250,000 in investigative costs. The settlement also includes a permanent injunction requiring the company to fix its procedures to provide consumers with clear disclosures and a way to revoke previously granted access to their personal information.
"Companies, whether they are on main street or in cyberspace cannot be allowed to deceive their customers and their consumers,'' Harris said.
Last November, Tagged paid $500,000 to settle a similar case brought by New York state Attorney General Andrew Cuomo and agreed to pay $250,000 to settle with the state of Texas, which had also launched an investigation.
The company previously said it has already voluntarily overhauled its registration procedures.
The firm said Tagged co-founder and chief executive officer Greg Tseng would not comment on the latest settlement beyond a post on the company blog that said the firm had "voluntarily ceased the membership drive before being contacted by the press or any governmental authority. Nonetheless, the campaign attracted the attention of San Francisco's District Attorney Kamala Harris."
Although Tseng said most joined or declined without lodging a complaint, "a small but vocal minority expressed that we were too ambitious in our recruitment efforts.'' Tseng said he was pleased to settle with San Francisco and "thrilled to put the dispute behind us."
Launched in 2004, Tagged claims that it is the third largest social network in the U.S. with about 80 million registered members, although only 25 percent are in the U.S. the company points to numbers from research firm ComScore that rank Tagged as fourth among social networks in total monthly visits and daily average visits, third in total minutes and page views and first in average time per session.
Ironically, Tagged in January announced it won a $201,975 default judgment against an Internet spammer who sent its members "false and misleading" e-mail with links to an adult dating site.
Posted By: Benny Evangelista (Email, Twitter) | April 12 2010 at 05:35 PM
Listed Under: Social networking
Read more: http://www.sfgate.com/cgi-bin/blogs/techchron/detail?entry_id=61135&tsp=1#ixzz0kwEYIcgO
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