Ashley Madison proposes $11.2 million payout for users exposed in data breach

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The parent company of Ashley Madison.com agreed Friday to a settlement of $11.2 million for the website's 2015 data breach that exposed data belonging to millions of its customers. An additional $500,000 has been set aside to administer the remaining $7 million earmarked for Ashley Madison members.

If combined claims exceed the settlement monetary pie, funds "will be allocated on a pro-rata basis based on each claim's recognized loss as compared to all recognized losses for all claims", according to the deal.

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Last December, Ruby agreed to pay US$1.66 million to settle a probe by the US Federal Trade Commission and several states into lax data security and deceptive practices, also without admitting liability. At the time of the hack, even the personal information of past users who had paid the $19 required to delete their account and scrub their information from the website was exposed. It appears to be the case that as account credentials were not verified for accuracy in 2015, Ruby is arguing that accounts could have been created using other individuals' information, and so it will be up to claimants to prove they were who they said they were on the website - and that they experienced loss or damages because of the data breach.

It's been nearly two years since extramarital affair website Ashley Madison was hacked and had its members' details exposed online. Ruby also spent millions of dollars to bolster its security and improve user privacy. Ashley Madison has long courted attention with its claim to be the Internet's leading facilitator of extramarital liaisons, boasting that "thousands of cheating wives and cheating husbands sign up every day looking for an affair". The settlement said the owners of the Ashley Madison site, which is still active, have added new security measures to the website.

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