The online dating firm denied media allegations. Photo: Cupid

British online dating company Cupid Plc has denied media claims that it had illegally used its staff posed as customers to encourage others to take out subscriptions.

A BBC report in February accused that Cupid's online dating services sent fake "flirtatious" messages to free members to encourage them to go for paid subscriptions. Further, Ukraine newspaper Kyiv Post's article on 15 March said that Cupid had hired "motivation managers" to encourage people to buy full subscriptions.

Following the report, the company said that it had launched an investigation about its methods. The announcement triggered a sharp decline in the share prices on Friday.

Cupid, which runs dating websites and, rejected the allegations as "misrepresentation and ill-informed speculation in the marketplace".

The company said it "does not employ members of staff to create fake profiles, impersonate users or use any other dubious practice to encourage customers to take out subscriptions or in order to retain existing customers, nor would the company condone, promote or persuade employees to do so."

Following the statement, the company's shares gained as much as 79 percent in morning trade. The shares are trading at 82.25 pence, up 67.86 percent, as at 11.15 am on London Stock Exchange.

The Edinburgh-based firm which operates in 58 countries also denied the claim that it was profiting from telephone numbers intended to cancel subscriptions. Cupid said it operated either toll-free numbers or low-cost number for callers from the US and Australia and the UK.

It added that the managers do not communicate with free members and their job is to monitor and interrogate the company's websites for technical or product issues and to moderate chat rooms and forums.

The company headed by Bill Dobbie said it was taking legal advice on the allegations. The finding of its independent audit of customer database is due to be published by the end of the second quarter.

The company added that it was in a strong financial position with more than £9m ($13.7bn, €10.5bn) in cash and revenues more than 20 percent higher than a year ago.