Kawahito Shraga & Westrick LLP Attorneys at Law | Los Angeles

Consumer class-action claim filed over massive data breach

When a company is hacked and its customer data stolen, one certain outcome will be class action lawsuits by customers against the corporate entity. The consumer class-action claim is often the best legal remedy available to get recompense for the vast numbers of individual victims of such crimes. The most recent notable corporate victim of a massive data breach has been health insurer Anthem. In the aftermath of the attack class actions have been filed in California and two other states to vindicate customer rights.

The breach was particularly devastating in that it affected some 80 million customers, former customers and even employees of the giant healthcare complex. Moreover, the amount of information is alarming, consisting of names, addresses, social security numbers, email addresses, income and employment data. In other words, there was enough information stolen to easily assume an individual victim's identity for any number of criminal purposes.

The disaster is reportedly one of the largest breaches ever of customers' personal information. Experts say that Anthem did not encrypt the consumer data that it stored. It also was allegedly not stored in separate databases that could be locked in the event of an attack. An Anthem spokesperson, however, stated that encryption would not have prevented the breach because the hacker used a system administrator's identification and password to enter the system. 

The California consumer class-action claim was filed in a federal district court on behalf of policy holders. The complaint alleges that the victims paid more for coverage than they would have if they had known how Anthem had failed to protect and had misused their personal information. It alleges also that Anthem employed "shoddy security protocols" with respect to the databases. Additionally, a multi-state investigation was announced by the National Association of Insurance Commissioners.

Source: californiahealthline.org, "Lawsuits Filed Over Anthem Data Breach in California, Other States", Feb. 9, 2015

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