• by Wendy Davis  @wendyndavis, January 7, 2021

Mobile ad platform Tapjoy has agreed to monitor the outside advertisers it works with, and to refrain from misleading users about how they can earn virtual currency, the Federal Trade Commission said Thursday.

“When companies like Tapjoy make promises that depend on their partners’ performance, they’re on the hook to make sure those promises are kept,” Frank Gorman, acting deputy direction of the FTC's Bureau of Consumer Protection, stated Thursday.

The settlement stems from allegations that Tapjoy promised in-game virtual currency to gamers who make purchases, sign up for offers or provide personal information.

“In many instances, Tapjoy never issues the promised reward to consumers who complete an action as instructed, or only issues the currency after a substantial delay,” the FTC alleged in a complaint made public Thursday.

The agency adds that the company received “hundreds of thousands” of complaints from people who said they didn't receive promised rewards.

“Tapjoy’s offers often require consumers to pay for products or services sold by the third-party advertisers,” the FTC alleges. “Consumers frequently complain that they spent a significant amount -- often more than $100 -- in completing various Tapjoy offers.”

The FTC also alleged that some consumers who divulged personal and sensitive health information for an in-game reward were subsequently presented with marketing surveys, instead of the promised reward.

In other cases, people who submitted email addresses or phone numbers “found that the personal information that they submitted was sold by Tapjoy’s advertisers to third-party marketers,” the FTC alleged.

The proposed settlement requires Tapjoy to “clearly and conspicuously” spell out how consumers will obtain rewards, police its advertiser-partners to make sure they provide promised rewards, and investigate consumer complaints, among other terms.

“Game developers relied on Tapjoy to generate revenue for themselves and offer gamers a way to earn currency to enhance their play,” FTC Commissioners Rohit Chopra and Rebecca Kelly Slaughter stated Thursday. “However, Tapjoy’s failure to screen fraudulent offers left both gamers and developers holding the bag.”

Tapjoy CEO Jeff Drobick said through a spokesperson that the company is “committed to facilitating a marketplace for consumers, advertising partners, and publishers to transact with each other in a fair and clear way, while ensuring timely access to customer service.”

He added that the FTC first expressed concerns about “reward delivery” in 2017.

“Over the past 3 years, we have enhanced the rewarding process and customer interaction,” he stated. “In accordance with our agreement with the FTC, we will further increase our efforts with advertisers to improve the clarity and transparency of their offers, and we will add enhancements to our offer testing and reward monitoring processes.”