They set your rating based on your own self assessment. You evidently said you were a beginner. Have your friends who started at 1200 gone up or down since they started?
It doesn't really matter in the long run. Ratings adjust pretty quickly. The guys who self reported as near-experts probably got their heads handed to them.
After playing and learning from play, I've climbed to around 1200.
I just started consistently playing live chess @5minute games and climbed from 800 to 900.
I convinced some friends to get the app and they all started at 1200.
Why is this?
Now it looks like ppl are starting at 1800.