Tagged has settled with two states over allegedly deceptive e-mail invitation practices, reported here in June.
The company will pay a total of $750,000 in penalties and legal fees to New York and Texas, and has added new privacy and security controls to its invite-a-friend system.
Over the summer New York Attorney General Andy Cuomo filed an intent to sue against Tagged, alleging the social networking site fraudulently induced people to sign up by indiscriminately sending e-mail invitations to its existing users’ contacts. It said Tagged then falsely informed those contacts that the account holder had sent them photos.
In both New York and Texas, the e-mail blasts were called as a violation of deceptive trade laws.
Under terms of the settlements, Tagged agreed to pay New York $500,000 in penalties and legal costs. Texas will get $250,000.