Cheat­ing web­site set­tles with U.S. af­ter data breach

The Denver Post - - BUSINESS - By Rob Gil­lies

toronto» Ruby Corp., the Toronto-based par­ent com­pany of the adul­tery dat­ing site Ash­ley Madi­son, will pay $1.6 mil­lion in set­tle­ments fol­low­ing an in­ves­ti­ga­tion led by the U.S. Fed­eral Trade Com­mis­sion into a mas­sive breach of the com­pany’s com­puter sys­tems and the out­ing of mil­lions of its mem­bers.

Hack­ers broke into the com­pany’s sys­tems in July 2015 and then posted the in­for­ma­tion on­line a month later af­ter the com­pany didn’t com­ply with their de­mands to shut down Ash­ley Madi­son. New York At­tor­ney Gen­eral Eric Sch­nei­der­man said Wed­nes­day that reck­less dis­re­gard for data se­cu­rity will not be tol­er­ated. New York joined 12 other states, the Dis­trict of Columbia and the FTC in the in­ves­ti­ga­tion.

New York’s at­tor­ney gen­eral said the in­ves­ti­ga­tion found lax data se­cu­rity prac­tices and said the com­pany made sev­eral mis­rep­re­sen­ta­tions, in­clud­ing a “Trusted Se­cu­rity Award” that ap­pears to have been fab­ri­cated.

It also found Ash­ley Madi­son cre­ated fake fe­male pro­files to en­tice male users.

The web­site — whose slo­gan was “Life is short. Have an af­fair” — is mar­keted to peo­ple look­ing for ex­tra­mar­i­tal re­la­tion­ships. It once pur­ported to have about 39 mil­lion mem­bers.

Hus­bands and wives across the world were con­fronted with their part­ners’ ex­tra­mar­i­tal af­fairs. The hack­ing trig­gered ex­tor­tion crimes and led to un­con­firmed re­ports of sui­cides.

The New York at­tor­ney gen­eral’s of­fice said the set­tle­ment with the com­pany is for $17.5 mil­lion but said the re­main­der of the $17.5 mil­lion pay­ment is sus­pended based on Ruby’s in­abil­ity to pay.

In ad­di­tion to mon­e­tary penal­ties, the at­tor­ney gen­eral’s of­fice said Ruby agreed to cease en­gag­ing in cer­tain de­cep­tive prac­tices, to not cre­ate fake pro­files, and to im­ple­ment a stronger data se­cu­rity pro­gram.

“This case rep­re­sents one of the largest data breaches that the FTC has in­ves­ti­gated to date, im­pli­cat­ing 36 mil­lion in­di­vid­u­als world­wide,” FTC Chair­woman Edith Ramirez said. “The global set­tle­ment re­quires Ash­leyMadi­ to im­ple­ment a range of more ro­bust data se­cu­rity prac­tices that will bet­ter-pro­tect its users’ per­sonal in­for­ma­tion from crim­i­nal hack­ers go­ing for­ward.”

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