VT TO GAIN FROM ASHLEY MADDISON SETTLEMENT
By Michael Bielawski
VTWatchdog
MONTPELIER — Vermont is getting a cut of a $17.5 million settlement between multiple states and the owner of AshleyMadison.org, the extramarital affairs service exposed of fraud after hackers released private data on 36 million customers.
Attorney General William Sorrell has been at the forefront of an investigative effort into the security breach that occurred in July 2015. As announced on Wednesday, the Green Mountain State will receive an initial payout of $116,000 from the multimillion dollar settlement.
“The State Attorneys General, and Vermont in particular, have been in the vanguard of protecting consumers’ privacy online,” Sorrell said in a written statement. “There is not a different standard simply because a consumer adopts a particular lifestyle. Fraud is fraud and it is against the law.”
In a separate conference call with media, Sorrell estimated that about 16,000 Vermonters have used the site.
In 2015, cyber-criminals hacked into the AshleyMadison.com system and stole user information including emails, photos, bank account information, sexual affair preferences and more.
The breach also revealed that Ashley Madison created thousands of fake user profiles to lure real customers, and misled users about a $19 “full delete” option that failed to erase user data properly.
The Federal Trade Commission concluded that blackmail and extortion were commonplace as result. In addition, at least two suicides were attributed to the breach.
According to FTC Chair Edith Ramirez, who spoke on the teleconference, the leak transferred more than 9.7 gigabytes of information and affected 36 million users worldwide. She said it it was among the largest online privacy cases in the FTC’s history.
Lawmakers and the incoming governor’s administration will decide how to spend the settlement money, Sorrell said. He added that Vermont’s cut is larger than the amounts awarded to other states because his office took the lead role in the investigation, which spread to Canada, Australia, and more than 15 government agencies.
“Vermont is a small state, but we take enforcement of our consumer protection laws very seriously,” Sorrell said during the teleconference.
Initially, AshleyMadison.com owner ruby Corp. will pay $1,657,000. The rest of the $17.5 million is being suspended due to the company’s current inability to pay. The online service also must undergo independent monitoring and adhere to strict security standards.
“We thought to obtain a judgment that, in particular, reflected the amount that users had actually paid to Ashley Madison,” Ramirez said. “ … We do not think it would serve the public interest to put this company out of business.”
