November 08, 2005

Getting Screwed By The Government

Who knew there were state laws governing on-line dating service prices?

Great Expectations, an Internet dating service, fell short of the expectations of two Manhattan women and must refund their membership fees, a Manhattan judge has ruled.

The women's transactions with Great Expectations, one of the nation's oldest and best-known dating services, are subject to New York state's Dating Services Law, Civil Court Judge Diane A. Lebedeff ruled.

Under this law, Great Expectations charged vastly beyond the legal limit for the services provided, Lebedeff concluded. The company's contract also "violated every mandate of the Dating Service Law" except one, the provision of a three-day "cooling-off" right to cancel.

"Where, as here, the dating service does not assure it will furnish a client with a specified number of social referrals per month, the service may charge no more than twenty-five dollars," Lebedeff wrote in Doe and Roe v. Great Expectations, 3034/05 and 3824/05.

Um, exactly what interest does the state have in setting dating service prices like this? We're not talking about utility-like monopolistic control of distribution infrastructure or a scarcity of resources issue, after all. Anybody with a hard-drive can set up a service. And if you don't like what you're getting, you can go right on down the Information Superhighway to the next place.

Where there are plenty of service providers and easy access, we rely on what to determine price? Anybody? Anybody? Bueller? Yes, the market.

Sigh. I suppose the rationale behind the Dating Services Law price caps must have been an attempt to overturn the age-old axiom that a fool and her money are soon parted. The plaintiffs here blew $1000 and $3700, respectively, to join up:

Great Expectations, founded in 1976, agreed to post their videos and profiles on a Web site, which other Great Expectations clients could review. Those clients could then contact Doe or Roe.

During the course of their memberships, one person contacted Doe and none contacted Roe.

The two women filed suit separately in Manhattan's small claims court, seeking the return of their membership fees.

I don't mean to sound heartless, but this is rayther like joining a golf club and then demanding your membership fee back because you didn't break par out on the course. So far as I can make out, Great Expectations did everything it had promised to do. In fact, the contract explicitly denied any assurances of a given number of referrals per month. Absent an issue of fraud, for example, I fail to see what business the state has in dictating the price. (I have no opinion about the other claims regarding contractual disclosure requirements and the like.)

Yips! to the ContractProf Blog.

UPDATE: Here's the relevant Noo Yawk Code Section. (It's Section 394-c. You have to scroll down a bit among the various other Byzantine regulations.) Did you know Noo Yawk has a Dating Service Consumer Bill of Rights? Yes, indeed-y:

Dating Service Consumer Bill of Rights

1. No social referral service contract shall require the payment by
you, the purchaser, of an amount greater than one thousand dollars. In
addition, no such contract may extend over a period of time greater than
two years.

2. No social referral service contract shall require you, the
purchaser, to purchase a good or service which is directly or indirectly
related to the social referral service. These extra services are known
as ancillary services and, while these ancillary service may be offered
to you, the law prohibits the seller from requiring that you purchase
this service as a condition of your social referral service contract.

3. If your social referral service contract costs more than
twenty-five dollars, the seller must furnish a minimum number of
referrals per month to you. If this minimum amount is not furnished to
you for two successive months, you have the option of cancelling the
contract and receiving a full refund of all the money you paid, less a
cancellation fee which cannot exceed either fifteen percent of the cash
price or a pro rata amount for the number of referrals furnished to you.

4. Your social referral service contract must specify the distance
which you, the purchaser, are willing to travel to meet any social
referral. No social referrals shall be furnished where you and the
referral live at a distance greater than the distance specified in the

5. The provider must have an established policy to address the
situation of your moving outside the area it services. This policy must
be explained in your contract.

6. If any provision of the social referral service contract is
violated, you have the right to bring a court action against the
provider which has violated the contract.

I'm sure all those boys who died at Valley Forge, Gettysburg, the Somme and Iwo are resting a little bit better knowing we're being cared for like this.

Posted by Robert at November 8, 2005 02:59 PM | TrackBack

During the course of their memberships, one person contacted Doe and none contacted Roe.

Woof! Woof!

Posted by: mojo at November 8, 2005 05:33 PM

The Somme? Was that before or after the Germans bombed Pearl Harbor?

I thought the Somme was an joint Franco-Brit production.

Or were they simply the ones standing in the breach, making the world safe for dating services?

Posted by: The Colossus at November 8, 2005 06:00 PM

Second Battle of the Somme in 1918, Mr. Smartypants.

Posted by: Robbo the LB at November 8, 2005 06:18 PM

Oh, that's right. Talk about a war where people paid for the same real estate twice.

Usually I associate the Somme with the 1916 episode where the Brits lost 60,000 men in the first half hour without gaining an inch.

Posted by: The Colossus at November 9, 2005 10:14 AM

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