Ashley Madison facing U.S. Federal Trade Commission investigation

Ashley Madison

After one of the largest data breaches in the world which resulted in the release of millions of users’ personal details and at least two reported suicides, Toronto-based Ashley Madison is now under investigation from the U.S. Federal Trade Commission.

According to a report from Reuters, Avid Life Media, which owns Toronto-based Ashley Madison, does not know the nature of the investigation. The company is currently facing U.S. and Canadian class action lawsuits filed on behalf of customers whose personal information was posted online, as well as allegations that it used fake profiles to manipulate some customers.

An Ernst & Young report commissioned by Avid which confirmed that Avid used computer programms called fembots to impersonate women and have conversations with paying male customers.

“Avid shut down the fake profiles in the United States, Canada, and Australia in 2014 and by late 2015 in the rest of the world, but some U.S. users had message exchanges with foreign fembots until late in 2015,” Reuters said.

The FTC’s consumer protection unit investigates cases of deceptive advertising, including instances when consumers are told that their information is secure but then handled sloppily. Since the hack, Avid Life Media has lost more than a quarter of its revenue, according to CEO Rob Segal and president James Millership.