New York sues social network Tagged for alleged email invite scam

Even though it’s based in San Francisco, social network startup Tagged is getting busted by the state of New York for scraping users’ address books to send out millions of new invites. Spearheaded by attorney general Andrew Cuomo, the suit alleges that the company used deceptive marketing practices and invaded users’ privacy to “artificially inflate traffic on the site.” On top of snagging users’ personal contacts without their knowledge or permission, Tagged sent promotional emails that looked like they were sent from individual users, Cuomo says.

The company’s chief executive officer, Greg Tseng, has responded to the allegations in a blog post, claiming that the language asking users to invite their friends to the service was worded unclearly (it has since been taken down), and denying that the site lifted contacts without users’ consent. Even so, he admitted in an interview with the New York Times that the company did receive thousands of complaints about the email invite issue — and it did issue an official apology for the confusion. (Thousands is probably a low estimate considering that more than 60 million of the fraudulent email messages have been sent, according to Cuomo’s office.)

The startup’s email system, which has since been dismantled, would ask recipients to check out their friends’ photos on the site. If they followed the links provided, they would be asked to enter personal information into a number of fields. Even if they abandoned the process part way through, the site supposedly scraped the information they had provided about their address books and sent new invites to all of their contacts.

Tseng’s blog post goes on to say that Cuomo’s allegations are “disheartening” and that the attorney general is “not accurate to portray Tagged, or any other social network, in this regard,” in an attempt, perhaps, to lump the site in with the likes of MySpace and Facebook, which have more established reputations.

The suit follows stirrings last month about Tagged becoming increasingly spammy as it attempted to grow its userbase. Both these rumblings and now the suit are sure to give pause to Tagged’s numerous and prestigious investors, including LinkedIn chief executive officer Reid Hoffman, former PayPal chief executive Peter Thiel, and Mayfield Fund.

Below is the complaint, originally posted by peHUB:

Tagged Complaint http://d.scribd.com/ScribdViewer.swf?document_id=17237346&access_key=key-77q5aulse9b0pugtlpw&page=1&version=1&viewMode=