Lawsuits Filed Against Allianz Due to Data Leak Incident
In today's digital age, the importance of securing consumer data has never been more crucial. Two key pieces of legislation, the FTC Act and the Gramm-Leach Bliley Act, provide penalties for companies that fail to secure consumer data effectively.
Unfortunately, several major companies have learned this lesson the hard way. Equifax, Yahoo (during the 2013-2014 period), and Marriott International are just a few examples of companies that faced lawsuits and settlements due to data breaches and neglected data security. These breaches resulted in class-action claims, with personal data such as names, addresses, birth dates, Social Security numbers, and more being compromised.
The recent data breach at Allianz Life, which potentially affects 1.4 million people, is another example of this growing issue. Two class action lawsuits were filed against Allianz in the Federal District Court for Minnesota, alleging that the company failed to notify victims of the data breach in a timely fashion. The plaintiffs also accuse Allianz of violating its own privacy policies and accepted industry standards such as the NIST Cybersecurity Framework and federal law.
The data breach at Allianz was accomplished through social engineering tactics used by cybercriminals. This underscores the need for companies to be vigilant and proactive in their cybersecurity measures.
The settlements against T-Mobile and Marriott highlight the need for improved cybersecurity practices within companies. In fact, the class actions are asking the court to order Allianz to improve its cybersecurity practices through data encryption and annual independent audits of its cybersecurity protocols.
The FCC's civil action against T-Mobile in 2024 resulted in a $31.5 million settlement requiring significant cybersecurity improvements. Similarly, the FTC's 2024 civil action settlement against Marriott required the implementation of heightened cybersecurity protocols.
The increased number of data breach class actions suggests a growing trend in consumer action against negligent companies. In 2024, there were 1,488 data breach class actions, almost triple the amount from two years earlier. This trend indicates a growing awareness among consumers of their right to data protection and a willingness to take action when that right is violated.
Continued class actions may be necessary to punish companies who do not act responsibly and increase cybersecurity. The need for increased cybersecurity practices and potential penalties for failure to secure consumer data remains a significant issue.
Companies that have settled consumer class actions for negligence related data breaches include Morgan Stanley, MGM Resorts, and T-Mobile. As the number of data breaches continues to rise, it is hoped that these settlements will serve as a deterrent for companies to prioritise cybersecurity and protect consumer data effectively.
While more action from the federal government in response to data breaches would be a positive step, it is unlikely under the present administration. Nevertheless, the growing trend of class actions against companies that neglect their cybersecurity responsibilities serves as a powerful incentive for companies to strengthen their cybersecurity practices and protect consumer data.
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