Dating firm Cupid checks press reports, shares tumble
Dating firm Cupid checks press reports, shares tumble
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LONDON (Reuters) – British online dating firm Cupid Plc said on Friday it had launched an investigation into a recent report about methods it allegedly used to get free customers to buy subscriptions.
At 1647 GMT, shares in Cupid, which began falling in the morning before the company announced its investigation, were down 57 percent at 52 pence, valuing the company at 94.6 million pounds.
Ukraine newspaper Kyiv Post published an article on March 15 which said that Cupid had hired “motivation managers” to encourage men to buy full subscriptions.
The article followed a BBC report last month featuring claims from members of Cupid’s online dating services who said they suspected fake messages had been used to encourage them to buy subscriptions.
The firm’s websites allow people to register for free, but they must buy a subscription in order to reply to messages.
A Cupid spokeswoman said the company’s statement had not been issued in response to the BBC report but she declined to specify which press allegations had prompted the investigation.
“The company recognises that one of the allegations in the article is that members who have signed on a 3-day trial membership are then encouraged through messages created by Cupid employees to move to a full subscription. This allegation will be directly addressed by the audit,” the spokeswoman told Reuters by telephone.
The Edinburgh-based firm, which owns the dating websites cupid.com and flirt.com, said it employed a “motivation team” of 24 people who did not communicate with non-paying members but communicated with new paying subscribers.
It said it has commissioned an independent audit by a major accounting firm and would report the findings to the market.
Cupid, which operates in 58 countries, denied the BBC claims in February and said it only acted “in a legal and appropriate manner”. The company reported a 31 percent rise in profits on March 5 and said it planned to enter new markets in 2013.
(Reporting by Brenda Goh, additional reporting by Alice Baghdjian; Editing by Michael Roddy)
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