Tagged.com pays $750,000 over deceptive emails

Tagged.com has paid $750,000 in penalties to New York and Texas after the states accused the social networking outfit of abusing its members' contact lists and spamming millions with deceptive promotional emails.

Attorney General Andrew Cuomo said on Monday his office reached an agreement with Tagged.com to pay $500,000 in "penalties and costs" to the state and to promise compliance with "industry-leading measures" regarding the fiddling of personal information of its members.

The company also settled a similar dispute with the state of Texas for $250,000.

Back in June, the New York AG announced he was fixing to sue Tagged for allegedly having devised an illegal plan to attract new members and obtain their email addresses. Cuomo said the social website sent out emails that appeared to come from their members' personal email accounts saying they posted private photos online for friends to view. The recipient had to register for Tagged in order to access the photos, which often didn't exist, which allowed the website to raid more user contact lists.

Tagged suspended the campaign supposedly in response to user complaints, but not before more than 60 million emails had been sent, according to the Cuomo's office.

"Unsuspecting users had no idea that Tagged had hijacked the email addresses of their colleagues, families and friends for the purpose of blasting them with spam," said the Attorney General in a statement. "This agreement holds that the company accountable for its invasion of privacy and puts the proper safeguards in place to keep it from happening again."

Cuomo is notoriously keen on prosecuting technology companies he feels have stepped out of line. In the recent past, he has slapped lawsuits and fines on Symantec and McAfee for auto-renewals, Dell for failing to provide "timely onsite repair" per its service contracts, and Intel for just plain being a monopolist.

This time, Cuomo's beef was that the invitations were made to appear as if they had been sent directly from members' personal email accounts rather than from Tagged.com.

Over at the Tagged blog, CEO Greg Tseng chalks it up to a "small but vocal minority" that felt its email campaign was "too ambitious" in its recruitment efforts.

"Despite differences of opinion about Tagged's intentions, we did acknowledge that the membership drive aggravated some customers. We also agree that Tagged had a responsibility to make sure people who interact with Tagged have a positive experience. To that end, in a meeting with Cuomo's office, we proposed substantial modifications to our process," Tseng wrote.

The website's reforms will include providing clear and obvious disclosure when requesting to access a new user's email contacts, and no longer accessing those contacts or sending messages on behalf of the member without their permission. Also before sending out email invites, Tagged will verify the emails with new members to make sure they don't inadvertently send invitations to everyone on their contact list — which by all accounts, is a major, major interweb foul.

For those scratching their head about very existence of such a thing as Tagged.com, it's probably the largest social website you've never heard of. According to Hitwise rankings on social networking sites for September, Tagged ranked number three in visits, below Facebook and MySpace and above Twitter.

Yes, the same Twitter that even your grandma knows about at this point.

On the bright side, not knowing about Tagged doesn't necessarily subtract you any internet points because it means you have a working email filter. ®