Online Personals Watch: News on the Online Dating Industry and Business

Mike Fitzgerald, CEO Of Dating Central

OPW INTERVIEW - July 26 - Mike runs one of the original and oldest white label dating services out of Gibraltar, which is just off the coast off Spain. There are some handy little tax benefits for being based in Gibraltar. Read on. - Mark Brooks

You’re based in Gibraltar. Tell us more about Gibraltar and the benefits of being in Gibraltar.
We moved to Gibraltar in 2004. The company was growing to the point where the VAT and corporation tax were becoming a hindrance to us for developing the company. The benefits of being in Gibraltar are zero rated VAT, so we pay no VAT on our membership fees, and the corporation tax is a flat fee of around 600 pounds a year. So we moved here and went from paying 16 to 20,000 pounds a month in VAT to paying zero. We also went from paying 50 to 60,000 pounds a year in corporation tax to paying 600 pounds. So from a company point of view, our overhead shrunk by 25% overnight by simply moving to Gibraltar.

Is there any down side to being in Gibraltar?
The biggest down side to Gibraltar is probably staffing. Finding skilled staff that know anything about affiliate management, SEO or web design is very, very hard. We normally have to use people who are based in Spain or fly them in from Romania or London.

Bringing them over for interviews is one thing, however climatising to Gibraltar is another one. You either love it here or you hate it. You can either fit in straight away and enjoy the lifestyle or you can find it to be slow.

Have you considered using a distributed work force and giving them the freedom to work from anywhere?
We do have staff who work from other places. We have a couple of people on the coast that work for us; we have some people in the UK that do copywriting for us. In the past, we’ve used design houses in India, Russia, and Eastern Europe in general, as well as Canada. So we do have staff that work from other places. However the core staff, such as affiliate management, customer service representatives and office managers, we need in the office.

There are some benefits for affiliates with you being in Gibraltar I understand. Could you tell us more about that? How do you attract affiliates with your business base?
When we moved to Gibraltar we spent a great deal of time talking to the tax people in the UK and Gibraltar to make sure we weren’t doing anything illegal and that we weren’t breaking any laws. So from an affiliate point of view, you don’t have to pass anything on to the tax man or the VAT man because the actual transaction is taking place in Gibraltar and not anywhere else.

Once again that’s a heck of a competitive advantage for your improvement in business efficiency. What is the founding story of Dating Central?
Me and my business partner Graham Hampson received our business degrees in Manchester in 1997. I was working in the insurance industry, on the IT side, and Graham was working for a design house. We both realised early on that design houses were reinventing the wheel every time they built a website, in a time frame of 6 to 8 weeks. We both agreed that the best way to build a website was to look at a template building system. You would then have a core engine that created these templates for you.

At the time, back in 1998/99, there was a great deal of buzz about the dating industry. So
we created a website called StudentsVille.com. We were going down the avenue of creating the world’s first white label dating service to allow all of these backroom web masters or small enterprises to have their own dating service without having to put in weeks of work and thousands of pounds.

About 6 months later, we started turning over a profit and within the first year we started to employ people. We’re self financed and never had any capital investment. Within 2 or 3 years we were making a very healthy profit. We were attracting affiliates from all industries and from all parts of the world. Once we moved to Gibraltar, we built the company up again. We managed to completely rebuild the structure, the database, the content as well as the back end. We were able to complete that project at the end of 2009. Whereby now, we have a completely new engine and new templates. Now it’s all very much Web 2.0.

How would you say you’re differentiated against the likes of WhiteLabelDating out of the UK and Global Factory who are going after the continental European market?
We differ in terms of the actual application itself. The WhiteLabelDating.com system is very much an “add your logo here” system. With our system, we try to integrate our service into your site. We are also a lot more open in regards to fees. We provide statistics where you can see a full breakdown of all your members, all of your commission, all of your charge backs and you can see at a glance, in real time, what you have done. So as far as the likes of WhiteLabelDating is concerned, we take it to the next level in terms of customisation and integration.

Our service is also tied to the niche markets. For example, we have Christian networks and Disabled networks. We’re giving our affiliates the ability to enter that market with zero overhead and zero cost. So I think the niche element of our service will always mean it will be very difficult for any competitor to come in and take away our membership database or our affiliate base. We spread ourselves across the different niches and it allows us to deal with a competitor entering the market.

You have some very specific niches. What would you say are your top couple of niches?
It’s changed in the last 5 years. We had a very stable Christian niche 5 years ago. The biggest surprise is the Lesbian network, which has really taken off. The ethnic network, which is for African-American and European Africans, has also done quite well.

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Mike Fitzgerald, BoneFish CEO Interview

OPW INTERVIEW -- Sep 18 -- Mike Fitzgerald is the CEO of BoneFish and interviewed with me on the subject of internet dating scamming and how to stop scammers. - Mark Brooks

What kind of scamming have you encountered on Bone Fish’s affiliate sites?
About 90% of the scamming on Bone Fish’s sites has come from Russian and African scammers. Russian scammers are primarily looking for people to send money to Russian women or to entice members to send airfares and give gifts, etc. 

African scammers are slightly different in that they send out emails relating tales of woe and stating that they have a great deal of money sitting in a bank account in Uganda and are looking for assistance to transfer it into an overseas bank account for a percentage of the sum (or similar).

Bone Fish has tried to combat this matter by bringing on-board a full time risk manager whose sole purpose is to deal with the scamming issue. I would say that at the moment, it is probably our number one priority as it affects our reputation with banks, members and affiliates, who are obviously being hit by the chargebacks on a weekly basis.

Do you ever encounter any types of scamming through the affiliates? Do you ever have any scammers sign up as affiliates?
About three years ago, we had someone from India register as an affiliate. However, upon seeing the affiliate’s average sales rocket about twice as high as our own, we realized that something was wrong. Their conversion rate was about 40-50% instead of 10-15%. Fortunately, we caught them at an early stage and cancelled their account. That's the only scammer I know of who actually signed up as an affiliate.

At the end of the day we try to cut scammers out before they become affiliates. As a result, we don't allow – and we heavily screen – new affiliates from certain countries. For example, potential affiliates from Russia, India and Africa.

How do scammers affect the reputation of your sites and services?
Members that have belonged to the service for two or three years and see some form scamming going on do tend to inform us of the problem so that we can remove the scammer(s) from the site. But, if he/she is a new member who has just registered, it is a very awkward situation and it makes us look very unprofessional. 

However, we do take measures to assure members that their information is safe and that they will meet genuine people on the site. We also take great measures to ensure that members are not contacted by scammers from Russia or Africa, because if they are contacted – especially within their first two or three weeks of being on the site – then it simply looks terrible.

What can the industry do to beat scammers?
Many a time I've looked on the internet for places that work like a “scammer central”. I've managed to find a few websites that list 5,000-7,000 members who are known scammers. However, I do not think that this is the right approach as it lists the names of the individual members (the scammers) that are contacting the members – not where they come from!

What I think the industry needs is a white list and a black list of IP ranges. For example, at Bone Fish Ltd we use an application on our credit card page that grabs the IP address. As such, we have blocked approximately 25% of all IP addresses in the world and still continually adding to the list on a regular basis. I’m hoping that this will catch some 95% of scammers.

With this in mind I don't think that having profiles of known scammers is the way forward. I think people need to sit down and actually look at the more technical side of it and determine where these people are actually coming from. Are they signing up in the UK, paying from Africa and then sending the messages from Africa? Or are they using IP masking tools to stop people from detecting their location? I think that these are the real issues rather than the specific members. I think we need to look at ISP and server-side solutions rather than having a great big database that's simply updated. Ideally, someone needs to put together a site from a technical point of view that will allow people to share techniques on how to block scamming.

Do you have any tips for smaller sites and services to beat scammers?
Yes, at Bone Fish Ltd we do employ a few measures that I am happy to share with you. I think the first thing smaller sites and services should do is get themselves an IP scanning tool which scans the IP addresses of all members that sign up to the site. Coupled with this, I would opt for one of the various merchants or banks on the internet, obtain a list of known high-risk countries and essentially impede all of these countries from being able to access the service – both on the credit card page and during the registration processes. (You have to remember that scammers can sign up in the UK and then pay through Africa, so special attention must be paid to these pages in particular).

The second thing I would recommend to smaller sites is a message frequency service which analyzes the number of messages a member sends out in a day. As such, owners of these sites can then analyze what is going out, and flag anybody who is sending 40 or 50 messages on a daily basis. This will help to assess who needs to be watched carefully and will essentially ensure that these members are not scamming other members. These are perhaps two primary things that will go a long way towards stopping scamming. 

And finally, the third thing I would do is have an email centre which stops .fr and .ru from logging into the service. The Ivory Coast uses .fr and Russia uses .ru. However, this will only work until scammers figure out that they are being blocked. But for the time being, it will certainly get rid of inexperienced scammers. Because every little helps. 

YouCanGetMe.com Free Dating For Women

PRESS RELEASE -- July 2 -- EasyDate announced totally free dating for women on YouCanGetMe.com, a UK dating site and one of the sites in its portfolio. Men are still charged £19.95 per month. Among other features, YouCanGetMe offers live video chat amongst members.

The full article was originally published at Media Syndicate, but is no longer available.

Mark Brooks: EasyDate is a white label service. Dating Central and WhiteLabelDating are similar services.  Email me if you'd like a copy of my spreadsheet round-up of the white label services.