The parent company of infidelity dating site Ashley Madison, hit by a devastating hack last year, is now the target of a U.S. Federal Trade Commission investigation, the new executives seeking to revive its credibility told Reuters.
The breach, which exposed the personal details of millions who signed up for the site with the slogan “Life is short. Have an affair,” cost Avid Life Media more than a quarter of its revenue, Chief Executive Rob Segal and President James Millership revealed in an interview, the first by any senior executive since the incident.
“We are profoundly sorry,” said Segal, adding that more could perhaps have been spent on security.
The two executives, hired in April, said the closely held company is spending millions to improve security and looking at payment options that offer more privacy.
But it faces a mountain of problems, including U.S. and Canadian class action lawsuits filed on behalf of customers whose personal information was posted online, and allegations that it used fake profiles to manipulate some customers. The site’s male-to-female user ratio is five to one, the executives said.
An Ernst & Young report commissioned by Avid and shared with Reuters confirmed that Avid used computer programs, dubbed fembots, that impersonated real women, striking up conversations with paying male customers.