Ashley Madison

Big changes and big problems are on their way for Ashley Madison. The hits keep coming after the adultery dating site’s high-profile hack last year.

First, the bad news. Ashley Madison is back in hot water thanks to a U.S. Federal Trade Commission investigation and a flood of lawsuits over the site’s use of “fembots” to lure cheating men. An Ernst and Young report confirmed that Avid Life Media, owner of Ashley Madison, used fake dating profiles to impersonate women and scam unwitting male users into entering their credit card information.

According to Gizmodo, Ashley Madison created more than 70,000 female bots in a “sophisticated, deliberate, and lucrative fraud.” The faux females would initiate chats with men by saying things like “Hmmmm, when I was younger I used to sleep with my friend’s boyfriends. I guess old habits die hard although I could never sleep with their husbands.”

Avid claims it shut down the bot accounts in the United States, Canada and Australia in 2014, and by late 2015 in the rest of the world. However, some U.S. users say they exchanged messages with foreign fembots until late in 2015. Now a handful of such users have filed class action suits against the company.

A recent statement from Avid Life Media indicates how the company plans to proceed. The statement announces "a new direction and total repositioning" of the service, with newly appointed chief executive Rob Segal and president James Millership at the helm.

"Our new team is committed to taking care of our members and to building on our portfolio of unique and open-minded online dating brands," said Millership. "Millions of people have continued to connect on our sites during the past year and they deserve a discreet, open-minded community where they can connect with like-minded individuals."

Millership reinforced that bots will no longer be used at Avid Life Media and Ashley Madison. The company has also stepped up security and hired a cyber-security team to implement new safeguards and monitoring. Both Millership and Segal say they do not know the focus of the FTC investigation.

Former users of Ashley Madison may notice other key changes. The site has undergone significant makeover, with a new “look and feel” that is distinctly less obvious about the adultery theme.

"Ashley Madison today is about so much more than infidelity, it's about all kinds of adult dating," the website says. It remains to be seen if its 46 million members agree.

Ashley Madison, the notorious dating website for married people, has been immersed in scandal since the company’s database was hacked a few months back. First, the hackers threatened to reveal users of the site, and then, it was discovered that most of the 5 million women registered on the site (a fraction of the number of men registered on the site) were actually linked to fake email addresses set up by employees of the website.

Now another potentially damaging piece of information has been uncovered by The Toronto Sun. Apparently, Ashley Madison’s parent company Avid Life Media, which owns several other dubious dating sites such as Cougar Life, The Big and the Beautiful, and Established Men, have been hiring attractive women to pose as founders of these dating sites.

According to the report in The Toronto Sun, Avid Life Media was trying to work the best PR angles possible to attract attention to these sites, a strategy that worked with Ashley Madison. Simply by trying to purchase ad space in a mainstream publication or even airtime during the Super Bowl, Ashley Madison received a lot of media attention – notably because they were refused the ad space/ time. However, new angles had to be thought out for the other Avid Life sites, including Cougar Life.

Cougar Life was repped by Claudia Opdenkelder, a beautiful spokesperson who portrayed herself to be the founder of the dating site which matched older women with younger men. "Why shouldn’t older women have younger men to love, just as older men can pursue younger women?" she campaigned to such outlets as The Globe and Mail and New York Times. She managed to generate a lot of coverage for the dating site.

The Big and the Beautiful followed suit by hiring plus-size America’s Next Top Model winner Whitney Thompson, who claimed to have founded the dating site, which caters to men looking for plus-sized women. Simone Dadoun-Cohen represented herself as the founder of Established Men, a site aimed at wealthy men who are looking for some arm candy – much like dating site SugarDaddy.com. Dadoun-Cohen claimed to be stripping to put herself through college before she met her wealthy boyfriend, hence the idea for the app. However, this turned out to be a made-up story.

The information was leaked from hackers of the Ashley Madison site, who also managed to get their hands on emails between former Avid Life CEO Noel Biderman, who stepped down after the hacking incident, and former media relations manager Shari Cogan. In the emails, the two discussed plans of what they would do about a potentially damaging segment about Cougar Life on ABC’s Nightline. “I don’t want this turning in to a witch hunt,” Biderman wrote. “We don’t want the site and Claudia to look like ‘frauds.'”

As of now, the three women who posed as the websites’ CEOs are no longer employed by Avid Life Media. Opdenkelder settled a lawsuit she brought against the company.

It must be noted that journalists went along with the stories of the CEOs without fact-checking, just taking their sources’ word for it – in this case, the PR staff of Avid Life Media. It seems the story made for better headlines than the truth.

The hack isn't the only bad press plaguing the Ashley Madison camp. Following the security breach, the leak of sensitive customer info, and a class action lawsuit, a former employee is now back in the news for claiming she was told to create hundreds of fake profiles for non-existent female “members.”

Doriana Silva, who worked at the company’s headquarters in Toronto, Canada, tried to sue the firm after claiming she suffered a repetitive strain injury after being told to input 1,000 counterfeit memberships in a short period of time.

According to court documents, Silva alleges that her job “entailed concocting phony profiles of alluring females and inputting these profiles into the appellants' online dating service in order to attract male subscribers.” She claims she was given only three weeks to create 1,000 fake profiles on Ashley Madison.

Her claim states that the purpose of the profiles is to “entice paying heterosexual male members to join and spend money on the website. They do not belong to any genuine members of Ashley Madison — or any real human beings at all." She also claims she was led to believe that the creation of fake profiles was considered a normal business practice in the industry.

Silva claimed £10 million in damages when she launched her case in 2012. Avid Life Media, Ashley Madison's parent company, counter-sued. The two sides agreed to drop their cases earlier this year, but the suit is back in the news following the big hack.

Online security experts have suggested Ashley Madison is perhaps guilty of further fraud. Some believe the company may have purchased bulk email addresses from marketing companies in order to create the impression that their user base is significantly larger than it really is.

A source involved in the FBI's investigation into the leak told The Daily Telegraph that inspections of the database suggest that a large number of the female profiles on Ashley Madison were in fact created by a relatively small number of individuals.

Ashley Madison says on its website that it cannot “guarantee the authenticity of any profile,” but it's hardly an uncommon phenomenon for an online dating site to artificially inflate its number of profiles to appear more attractive to new users. Ashley Madison may have taken publically available information from other databases to use on its site.

Alternatively, actual users may have stolen other people's email addresses to avoid giving their real name and contact info.

Either way, the news is ensuring Ashley Madison is hit even harder. Avid Life Media has scrapped plans to float on the London Stock Exchange and now faces serious legal action from those affected by the hack.

The bad news just keeps coming for Ashley Madison.

The adultery dating site was hacked last month by a group calling itself The Impact Team. At the time of the security breach, The Impact Team threatened to release customer records online if Ashley Madison was not shut down.

Avid Life Media (ALM), which runs Ashley Madison and other dating sites, did not back down and the hackers made good on their threat. More than 30 million email addresses and credit card numbers have been exposed, including those of notable figures in entertainment and politics.

In the wake of the leak, things have only gotten worse for Ashley Madison. There are reports of suicides that may be tied to the hacking scandal. Avid Life Media is offering a $500,000 reward to anyone with info that leads to the arrest of the hackers. The company is also facing a $760 million class action lawsuit over the data hack.

Eliot Shore, a widower from Ottawa, is the plaintiff in the suit filed this week in Ontario against Avid Life Media and Avid Life Dating, a subsidiary that runs Ashley Madison. The legal action alleges that the privacy of thousands of Canadians was breached when the hackers infiltrated Ashley Madison.

"Numerous former users of AshleyMadison.com have approached the law firms to inquire about their privacy rights under Canadian law," the law firms Charney Lawyers and Sutts, Strosberg LLP said in a statement. "They are outraged that AshleyMadison.com failed to protect its users' information. In many cases, the users paid an additional fee for the website to remove all of their user data, only to discover that the information was left intact and exposed."

Lawyer Ted Charney told VICE News that around 100 people have expressed interest in joining the class action so far, noting that anyone who registers will remain anonymous.

It will be up to a court to decide whether Ashley Madison did enough to protect its customers. David Fraser, a Halifax-based internet, technology, and privacy lawyer, thinks the class action faces “a bit of a challenge.” He says the Ashley Madison terms of service are "decidedly consumer unfriendly" and "completely covered their butt."

There may even be a question over whether this can be a class action at all. Ashley Madison's terms preclude customers from filing such suits, but consumer protection legislation in Ontario protects the right to do so.

Either way, it won't be the end of the issue for Ashley Madison. The Associated Press reported that another lawsuit seeking class action status was filed in the US days after the hack became public.

By now, we’ve all heard of the latest in cyber attacks; personal information from infidelity dating website Ashley Madison was stolen by hackers who have since threatened to expose its 37 million users.

However, information about what exactly was stolen – such as credit card information or social security numbers – is still a bit hazy. Ashley Madison customer service has, according to news website Inquisitr, provided customers with conflicting information about what was subject to the hack, namely because they don’t know what was stolen and sold or given to third parties. Some customers have been told that credit card numbers weren’t hacked, but others were told that third party credit card data was indeed hacked.

A few websites have emerged to help customers see if their personal data has been leaked, including a site “Was he on Ashley Madison,” (WasHeOnAshleyMadison.com). Customers of Ashley Madison and also of hacked website Adult Friend Finder could search through emails to see if theirs were compromised. However, as of July 31, that website was put up for sale, and quickly bought by someone looking to make a statement to users of Ashley Madison and Adult Friend Finder. Hours later, what appears to be a former Ashley Madison user posted a statement lashing out against the company, including this paragraph to those who were hacked:

“You have been through enough pain and anger and anxiety about their hack without having some opportunistic scammer buy this domain and charge you money for data they do not have.

I have decided that I am going to fight the AM people so I can keep this domain. They have refused to offer any of their customers any kind of solace or at least a year of identity theft protection which is standard practice when your data is hacked. They prefer to sit in their ivory tower and hide behind their lawyers.

This is not OK with me and it should not be OK with you.”

According to Inquisitr, there have been many sites claiming to provide information for those who feel their personal information could have been hacked, but many of these sites have been nothing but spam themselves. According to an investigation by BBC, Ashley Madison users were sent emails providing links to third party websites, supposedly with information about the hack. Some included the recipient’s Ashley Madison user name, giving more credence to the email, but worrying customers that their information was indeed sold to a third party. However, when people clicked on the links, they were sent to spam sites that were booby-trapped with malware and, in some cases, graphic images and videos of adulterers ‘burning in hell.’

Now Ashley Madison users are turning to Reddit to provide current information about the hack to other users in an attempt to gain information.

One Reddit user claimed that Ashley Madison sold user information to third party sites from the beginning, because that user began getting spam emails as soon as he/she signed up on the website. While it's difficult to tell where exactly information has gone, it has been compromised. We'll see what Ashley Madison does next to address the issue.

Cheaters are having a bad week.

In case you're not up to speed on the latest scandal to rock the online dating world, here's the gist: a group of hackers calling themselves The Impact Team attacked Ashley Madison and gained access to the site's database of 37 million members. The hackers got hold of financial records, addresses, and other highly sensitive personal information, and have threated to publish it online unless Ashley Madison shuts down.

Avid Life Media, Ashley Madison's parent company, says it has secured its sites and is working with law enforcement agencies to find the parties responsible. Despite their efforts, files containing emails and passwords for some Ashley Madison users have started to spread online.

Some have called this the beginning of the end for Ashley Madison. It's devastating for any website to be hacked, but infinitely more so when it's designed for a philandering clientele whose top priority is privacy. Ashley Madison has failed to uphold one of its most important – perhaps the most important – promises.

And it gets worse. Avid Life Media announced earlier this year that it hopes to raise $200 million in an initial public offering in London in 2015. The brand's value is based almost completely on the service's ability to protect its members' privacy. Without that, is the Ashley Madison worth anything in the first place?

“If a password manager such as LastPass was hacked,” writes Christina Warren for Mashable, “the service would be dead in the water. After all, the whole point of a password management service is to secure and protect your passwords.”

The same principle applies here. Ashley Madison's adulterous target audience is likely to be wary of a site with a history of being hacked. New customers will think twice before joining. Current customers will jump ship. And the IPO? If the hack doesn't squash it completely, it will at least significantly reduce the value of the company.

A renaissance isn't impossible. Other companies have endured disasters, rebranded, and risen from the ashes. It's possible that Ashley Madison could update its security practices, change its name, and come back to reclaim its place in the online dating market.

But should it? Will anyone buy into the narrative that Ashley Madison has seen the error of its ways and reformed? Will cheaters, who require privacy more than anything else, take a chance on a service with such a shoddy track record? The damage may already be irreversible.