Ashley Madison facing FTC inquiry a year on from devastating hack
Extramarital dating site under investigation by US regulator a year after entire user database leaked online
Avid Life Media (ALM), the corporate parent of hacked extramarital dating site Ashley Madison, is being investigated by the US Federal Trade Commission according to the company’s new executive team.
Appointed in April, the new chief executive, Rob Segal, and the president, James Millership, have been given the job of righting ALM in the aftermath of the hack, which saw the entire membership register of Ashley Madison posted to the internet. Over the following year, ALM lost more than a quarter of its revenue, as worried members fled the company’s portfolio of dating sites.
While they are aware of the FTC’s investigation, neither Segal nor Millership know what precise aspect of the company is being examined. As well as the hack itself, the perpetrator of which is still unknown, the breach exposed several other potential red flags in the company.
Most damningly, the database suggested that a huge proportion of the female users of the site were in fact fake accounts, created and operated by Ashley Madison to lure men into using and paying for the site. When the “fembot army” was first exposed, by tech site Gizmodo, Ashley Madison denied the allegations, saying that the reporter had “made incorrect assumptions about the meaning of fields contained in the leaked data”.
However, ALM later commissioned its own report into the creation of user accounts, from independent auditors Ernst & Young, and found that the company had indeed made fake profiles, which were then run automatically to impersonate real women.
According to the report, those “fembots” ran until late 2015, although the company stopped using them in the US, Canada and Australia earlier. Another American company had been forced by the FTC to pay a fine of $616,165 similar practices in 2014.
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ALM said it does not know the focus of its own FTC investigation, but asked by Reuters about the fembot messages sent to US customers, Segal said: “That’s a part of the ongoing process that we’re going through … it’s with the FTC right now.”
ALM is trying to recover from the hack, and has positioned the two new executives as the starting point of its push back to respectability. In a statement, Segal apologised for the hack, and said the company was trying to make amends.
“A year ago, Avid Life Media was silenced by a devastating, criminal hack that affected our company and some of our members,” he said. “The company is truly sorry for how people’s lives and relationships may have been affected by the criminal theft of personal information. That’s why we’re charting a new course and making some big changes.”
The company has hired cyber security experts at Deloitte and expects to reach the first level of Payment Card Industry compliance, an industry standard, by September.
“We had to basically reinvent their security posture,” said Robert Masse, who leads Deloitte’s incident response team. His team, hired by the company in late September, found simple backdoors in Avid Life’s Linux-based servers.
One unexpected result of the hack: a surge in popularity for Ashley Madison itself. Apparently taking the stance that lightning doesn’t strike twice, more than 4m new accounts were made in the four months after the hack, according to a counter on the site.
ALM’s new leadership expressed little desire to lose that membership pool, but said they would be moving some focus away from infidelity: a big change for a site which once advertised with the tagline “life is short, have an affair”.
“We certainly feel that the Ashley Madison brand can be repositioned,” Segal said. The new Ashley Madison website focuses instead on “discretion”, and advertises itself to people wanting to explore polyamory or same-sex relationships as much as it does to those wishing to cheat on partners.
The site does concede that “there are still men and women seeking an affair on Ashley Madison, but we don’t let that define us and neither should you”.
Extramarital dating site under investigation by US regulator a year after entire user database leaked online
Avid Life Media (ALM), the corporate parent of hacked extramarital dating site Ashley Madison, is being investigated by the US Federal Trade Commission according to the company’s new executive team.
Appointed in April, the new chief executive, Rob Segal, and the president, James Millership, have been given the job of righting ALM in the aftermath of the hack, which saw the entire membership register of Ashley Madison posted to the internet. Over the following year, ALM lost more than a quarter of its revenue, as worried members fled the company’s portfolio of dating sites.
While they are aware of the FTC’s investigation, neither Segal nor Millership know what precise aspect of the company is being examined. As well as the hack itself, the perpetrator of which is still unknown, the breach exposed several other potential red flags in the company.
Most damningly, the database suggested that a huge proportion of the female users of the site were in fact fake accounts, created and operated by Ashley Madison to lure men into using and paying for the site. When the “fembot army” was first exposed, by tech site Gizmodo, Ashley Madison denied the allegations, saying that the reporter had “made incorrect assumptions about the meaning of fields contained in the leaked data”.
However, ALM later commissioned its own report into the creation of user accounts, from independent auditors Ernst & Young, and found that the company had indeed made fake profiles, which were then run automatically to impersonate real women.
According to the report, those “fembots” ran until late 2015, although the company stopped using them in the US, Canada and Australia earlier. Another American company had been forced by the FTC to pay a fine of $616,165 similar practices in 2014.
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ALM said it does not know the focus of its own FTC investigation, but asked by Reuters about the fembot messages sent to US customers, Segal said: “That’s a part of the ongoing process that we’re going through … it’s with the FTC right now.”
ALM is trying to recover from the hack, and has positioned the two new executives as the starting point of its push back to respectability. In a statement, Segal apologised for the hack, and said the company was trying to make amends.
“A year ago, Avid Life Media was silenced by a devastating, criminal hack that affected our company and some of our members,” he said. “The company is truly sorry for how people’s lives and relationships may have been affected by the criminal theft of personal information. That’s why we’re charting a new course and making some big changes.”
The company has hired cyber security experts at Deloitte and expects to reach the first level of Payment Card Industry compliance, an industry standard, by September.
“We had to basically reinvent their security posture,” said Robert Masse, who leads Deloitte’s incident response team. His team, hired by the company in late September, found simple backdoors in Avid Life’s Linux-based servers.
One unexpected result of the hack: a surge in popularity for Ashley Madison itself. Apparently taking the stance that lightning doesn’t strike twice, more than 4m new accounts were made in the four months after the hack, according to a counter on the site.
ALM’s new leadership expressed little desire to lose that membership pool, but said they would be moving some focus away from infidelity: a big change for a site which once advertised with the tagline “life is short, have an affair”.
“We certainly feel that the Ashley Madison brand can be repositioned,” Segal said. The new Ashley Madison website focuses instead on “discretion”, and advertises itself to people wanting to explore polyamory or same-sex relationships as much as it does to those wishing to cheat on partners.
The site does concede that “there are still men and women seeking an affair on Ashley Madison, but we don’t let that define us and neither should you”.
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