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Ashley Madison Agrees to $11.2 Million Settlement for Data Breach

By William Vogeler, Esq. on July 18, 2017 | Last updated on March 21, 2019

Ashley Madison, the adult site that encourages extramarital affairs, has agreed to pay $11.2 million to settle with users whose personal information was hacked and released on the internet.

The settlement will go to resolve dozens of cases resulting from the data breach of some 37 million user accounts. The deal must be approved by a federal judge in the case, which is set for review on July 21.

The settlement ends an embarrassing two-year legal battle, but cannot close the door on the biggest elephant in the adult services arena: what if somebody finds out about your online affairs?

No Confidentiality

The data breach set off alarms in board rooms and bedrooms across the country, when in July 2015 a hacker group called "The Impact Team" announced it had stolen Ashley Madison data and threatened to release users' names and other information unless the company shut down its website.

The company responded by saying it could not secure its website and reporting the heist to authorities. The hackers then released 60 gigabytes of data on the dark web.

"Too bad for those men, they're cheating dirtbags and deserve no such discretion," the hackers wrote.

With the donkey out of the barn, Ashley Madison could do nothing but respond to lawsuits. The settlement, which promises confidentiality for those who receive payments, cannot recall the leaked data.

Online Warfare

The release reportedly led to divorces, resignations, and even suicides. Those were the foreseeable consequences.

Eric Sinrod, a FindLaw columnist, said the online adulterers probably didn't realize they had stepped into a cyberwar minefield. He said foreign spy agencies, including China and Russia, were cross-referencing their data with the Ashley Madison information.

"Why would they do that?" he posed. "The point would be to exert leverage and to potentially blackmail U.S. federal employees."

The settlement does nothing for those people. However, the government extracted $1.6 million from Ashley Madison for the Federal Trade Commission and several states in the process.

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