Data breach settlement of $380.5 million approved in credit reporting agency class action
On January 13, the U.S. District Court for the Northern District of Virginia issued a final order and judgment in a class action settlement between a class of consumers (plaintiffs) and a large credit reporting agency (company) to resolve allegations arising from a 2017 cyberattack causing a data breach of the company. After the company announced the breach, many consumers filed suit and were eventually joined into a proposed settlement class. As previously covered by InfoBytes, the plaintiffs alleged that the company (i) failed to provide appropriate security to protect stored personal consumer information; (ii) misled consumers regarding the effectiveness and capacity of its security; and (iii) failed to take proper action when vulnerabilities in their security system became known. The company and the plaintiffs later submitted a proposed settlement order to the court.
According to the final order and judgment, the court certified the settlement class of the approximately 147 million affected consumers, finding the class was adequately represented, and approved the “distribution and allocation plan” as fair and reasonable. In the order granting final approval of the settlement the company agreed to, among other things, pay $380.5 million into a settlement fund and potentially up to $125 million more to cover “certain out-of-pocket losses,” $77.5 million for attorneys’ fees, and approximately $1.4 million for reimbursement of expenses. Class members are eligible for additional benefits including up to 10 years of credit monitoring and identity theft protection services or cash compensation if they already have those services, as well as identity restoration services for seven years. The company also agreed to spend at least $1 billion on data security and technology in the next five years.