Legal

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.

Late last year, a lawsuit was discreetly filed by Spark’s popular niche dating website JDate against dating app JSwipe. According to Forbes who broke the story, JDate claimed that JSwipe was infringing on the company’s trademark “J” by using it in the name of their app.

JDate isn’t the only Jewish online dating website that caters to the Jewish community and uses the letter “J” in its offerings. There is also JCrush, JWed, JPeopleMeet, Jewish Café, and Jewcier to name a few. In fact, it seems difficult to name a niche dating app catering to the Jewish community without using the letter J. But there is more to the story, which potentially puts all online dating sites and apps in danger of patent infringement.

In the lawsuit, JDate also claims it owns the patent on software that “confidentially determines matches and notifies users of mutual matches in feelings and interests.” JSwipe is similar in its process to Tinder, which also notifies users when matches swipe right on their picture. This is in violation of JDate’s patent.

Why then has JDate not sued other websites or dating apps, since this is such a broad definition of matching that almost every dating app and website uses? Notifying users of potential matches is the bread and butter of online dating. Why not go after an app like Tinder?

The key might lie in the competition JSwipe presents, especially if it is gaining market share in the niche online dating space. According to the Forbes writer who broke the story, JSwipe’s founder David Yarus confidentially confessed the lawsuit to him, though he is forbidden from discussing details. Instead of accepting JDate’s acquisition offer (which he considered too low), he decided to fight the lawsuit rather than sell. (For all you fans of Silicon Valley on HBO, this sounds vaguely similar to Pied Piper’s plight as an up-and-comer in the tech world.)

But JDate might have a case against JSwipe. According to Forbe’s research into intellectual property law, the language used in JDate’s patent was registered in 1999, and it is broad – broad enough (as mentioned earlier) to cover most dating websites and apps on the market today – so they could essentially claim IP infringement over any other company in the space. According to analysts, this might be a move by JDate to acquire JSwipe for a steal. Chances are if they tried to sue Match or Tinder, those companies' lawyers would be able to fight and win. JSwipe is too small a player.

Using the letter “J” in a dating app or website is apparently less clear-cut in legal terms. JDate would have to find evidence that users confuse Jswipe with JDate, which means asking users to testify that they thought Jswipe was part of JDate, or somehow affiliated, which would be trickier and more time-consuming.

JSwipe is fighting back. They have set up a crowdfunding website and asked for Jewish lawyers to take them on pro bono. 

For more on the Spark Networks dating site, you can read our review of JDate.

On Sunday June 14^th, people across America were acknowledging Flag Day, an annual tradition, over social media. Coincidentally, it was also the annual celebration of the LGBTQ community – an event known as Pride. So when Coffee Meets Bagel reached out via social media to announce its support of Flag Day, the online dating service mistakenly caused an uproar because of a typo.

The now-infamous tweet which was widely criticized over social media and the subject of a story in the Washington Post, said: “It’s Fag Day. Hoist your colors and don’t forget to LIKE today’s Bagel.”

People on the East Coast were the first to catch the mistake, but many didn’t realize it was a typo and immediately took to Twitter to denounce the dating service, with one person posting: “Got a notification from @coffeeMbagel saying today was "fag day." I'm disgusted at the audacity to say that during pride. #coffeemeetsbagel.”

Many people weren’t aware of Flag Day, but they were aware of Pride celebrations, which made the typo even worse. They thought the company had posted the tweet on purpose.

Coffee Meets Bagel took down the post after they realized the typo. But thanks to the speed at which social media can influence a story, and the incredibly bad timing that the typo happened during Pride, the company had little chance to correct the error. They have since been apologizing and repeating that it was just a simple mistake.

About three hours after the notification went out, users received an e-mail from the company’s head of customer experience apologizing for the misspelling. It reads, in part:

“I would like to apologize wholeheartedly for the message you received this afternoon. The misspelling of Flag Day was a mistake and a complete oversight. We’re updating our process to ensure something like this does not happen again…Coffee Meets Bagel, as a company and as individual employees, celebrates the LGBTQ community and would never use such a word.”

While it might just be a simple oversight, the bigger question is: will it hurt CMB in the long-run, if people associate their brand with a lack of support of the LGBTQ community?

We have all sent emails and social media posts with typos – this isn’t uncommon. What is a shame in this instance is that a company sent an official tweet meant to show support of both Flag Day and the LGBTQ community, and yet, ended up alienating their customers and potential customers in the process.

IAC is no doubt a leader in the dating market, with such prominent online dating brands as Match.com, Tinder, and OkCupid, which make up a company subsidiary called The Match Group.

The Match Group has announced its plans to launch its first IPO, making the company available for investment dollars from the general public. Match.com has long been a cash cow in the online dating industry with its paid subscription service, and Tinder with its new premium paid service has been reported to be worth about $1 billion by the end of the year. In fact, the combined revenues of all the companies in The Match Group accounted for nearly one third of IAC's overall revenue in the most recent quarter. They're also growing rapidly, surging 13% year-over-year in the most recent quarter to about $239 million.

Greg Blatt, Chairman of The Match Group said in a statement: "The Match Group is poised for substantial growth in the coming years. The dating industry has come a long way since its inception, but the category remains underpenetrated.  We believe the combination of our more established businesses such as Match, Meetic, and OurTime, and earlier stage businesses such as Tinder and OkCupid, creates an attractive combination of significant cash flow generation, strong margins and meaningful growth potential.” 

This comes at a good time, as Zoosk recently pulled its plans to launch an IPO, leaving the dating space wide open for potential investors. Ashley Madison, a dating site for infidelity, was quick to throw its hat in the ring, too. They are planning a second attempt at an IPO for later this year after a forfeited attempt in 2011.

The Match Group joins other prominent and publicly traded online dating services, notably Spark Networks, which owns several niche dating sites such as JDate, Christian Mingle, and BlackSingles.com, as well as Jiayuan.com, the largest online dating site in China.

After the IPO, investors will be able to buy stock in the company, although the ticker symbol is not yet known. Notably, IAC made the decision to split The Match Group from its parent company to do the IPO.

Barry Diller, IAC’s Chairman and Senior Executive said in a statement: "As many know from our actions over the last 20 years, I'm not a believer in simply agglomerating assets in perpetuity.  I've long felt that as entities grow into size and maturity it's healthy to give them separation and independence from a mother church.”