- The Washington Times - Tuesday, July 5, 2016

A federal investigation is underway of dating website Ashley Madison nearly one year after millions of its customers saw their intimate secrets exposed in a massive security breach, its new owners said Tuesday.

Three months after taking control of the website’s Toronto-based parent company, Avid Life Media, CEO Rob Segal and President James Millership told Reuters that Ashley Madison is the subject of an active Federal Trade Commission probe.

Touted as a service that enabled extramarital affairs, Ashley Madison came under fire in July 2015 after hackers seized control of more than 25 gigabytes of company data, including the personal details concerning millions of paying customers. Speaking to Reuters, however, Avid’s newly appointed execs indicated that the active probe may not necessarily be focused on the security breach, but rather a business practice it helped bring to light.

Avid relied on computer programs that impersonated women users, inflating the number of female customers and coercing paid members into conversing with imaginary account holders, according to an Ernst & Young report commissioned by Avid and shared with Reuters. Avid began phasing out these “fembots” in 2014, but the report suggests legitimate users continued to exchange messages with them through late 2015, Reuters reported. In the interim, internal data leaked as a result of the breach further exposed the mass deployment of fake user accounts.

Although Avid told Reuters it was unsure of the FTC investigation’s exact focus, Mr. Segal acknowledged that the fembot messages were part of the probe.

“That’s a part of the ongoing process that we’re going through. … It’s with the FTC right now,” he told Reuters.

The admission to Reuters came one day after Avid’s new executives published their first official communique since taking over the company in April, announcing a “total repositioning of all its brands” and apologizing for the breach that brought infamy to Ashley Madison and contributed to the resignation of Noel Biderman in August.

“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,” Mr. Sega said in Monday’s statement.

Mr. Millership told The New York Times Tuesday that purging the fembots from Ashley Madison was among the first actions taken by the two new execs upon taking over Avid in April.

“It’s certainly not a business practice that either Rob or I condone,” he said.

A British dating website, JDI Dating, settled with the FTC in 2014 to the tune of $616,165 after similarly being accused of using fake profiles. Avid may finish 2016 with $80 million in revenue down from $109 million in 2015, Reuters reported.

The FTC declined to comment when reached by both The New York Times and Reuters. 

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