Ashley Madison parent company Avid Life Media facing 'fembot' investigation

Avid Life Media (ALM), the parent company of hacked adultery website Ashley Madison, is facing a US Federal Trade Commission (FTC) probe over its use of automated software called 'fembots' on its websites, which impersonated real women to lure in male customers.

In a report commissioned to analyse the aftermath of the mid-2015 data breach, compiled by consultancy firm Ernst & Young, it is confirmed the firm deployed software-enhanced chats and messages.

The document, viewed by Reuters, found that ALM – and Ashley Madison by extension – claimed to have shut down the use of these fake profiles in the US, Canada and Australia in 2014. However it uncovered evidence that some US-based paying users were still being targeted by the fembot army until late 2015.

ALM officials – including chief executive Rob Segal and president James Millership – maintain they are unaware of the full scope of the FTC probe. For his part, Segal said the use of software is "part of the ongoing process".

In July last year, a hacking group called Impact Team targeted Ashley Madison and leaked sensitive information on its 37 million users – including names, passwords and credit card information.

By August, and after three separate data dumps, the records spread to the open internet, a class action lawsuit had been launched and CEO Noel Biderman was forced to resign in disgrace.

Upon analysis, evidence quickly emerged suggesting that Ashley Madison had created over 70,000 female bots to target male users. According to Gizmodo, 20 million out of 31 million men had received a bot message. Furthermore, the dating website reportedly had bots designed specifically to target customers who paid a premium price for a "guaranteed affair".

Speaking to Reuters openly for the first time, Segal and Millership, the new bosses hoping to reinstate the Ashley Madison brand to its former glory, admitted the breach had cost the business "over a quarter of its revenue". The pair also said the identities of the Impact Team hackers remains unknown.

In a course-adjustment plan, Ashley Madison will spend millions to improve its security and privacy for users, according to the new hires. "We are profoundly sorry," said Segal.

ALM – which has a portfolio of niche dating websites – is set to make "roughly $80m in revenue" this year, the executives maintained. "We certainly feel that the Ashley Madison brand can be repositioned," Segal said, before promising "a vastly different approach" to marketing. An FTC spokesman declined to comment.