Betterment class action lawsuits overview:
- Who: Betterment customers filed separate class action lawsuits against the company.
- Why: The plaintiffs say Betterment failed to properly secure their personally identifiable information (PII) in a recent data breach.
- Where: The Betterment class action lawsuits were filed in New York federal court.
Two class action lawsuits accuse Betterment, a fintech company based in New York, of exposing customers’ personally identifiable information in a recent data breach.
Plaintiffs Randell Huff and Brittany Grimseley filed a class action lawsuit against Betterment on Jan. 15, while plaintiff Samuel Tsou sued Betterment and Betterment Holdings on Jan. 16. Both class action lawsuits were filed in New York federal court, alleging violations of state and federal consumer laws.
According to Tsou’s lawsuit, Betterment failed to properly secure and safeguard the PII that it collected and maintained as part of its regular business practices, including customers’ names, email addresses, physical addresses, phone numbers and dates of birth.
On Jan. 12, 2026, Tsou says he received a notice from Betterment indicating that on or around Jan. 9, the company was subjected to a data breach in which his PII was accessed without authorization.
Tsou says that, upon discovery of the data breach, Betterment launched an investigation and confirmed that unauthorized parties were able to gain access to certain company systems using access credentials obtained through social engineering mechanisms.
Betterment was able to verify that unauthorized parties did in fact access PII, he says.
Plaintiff claims data breach enabled fake sales solicitations
Tsou says Betterment reported that cybercriminals were able to use the unauthorized access to send fraudulent sales solicitation emails through its approved customer marketing and communication channels.
Tsou says Betterment also reported on its data breach update webpage that its website and mobile application were subject to disruptions on Jan. 13 to a disrupted denial-of-services (DDoS) attack.
Despite including information on the DDoS attack on the data breach update webpage, Betterment has not expressly indicated the DDoS attack was precipitated by the same parties responsible for the data breach, he says.
Tsou is looking to represent anyone in the United States whose PII was accessed and/or acquired by an unauthorized party as a result of the data breach, including those who received notice of the data breach.
The plaintiffs are suing for negligence, invasion of privacy and breach of fiduciary duty and are seeking certification of the class action, damages, fees, costs and a jury trial.
Meanwhile, Capital Health agreed to pay $4.5 million to settle class action claims tied to its alleged failure to protect consumer data in a 2023 breach.
What do you think of the allegations made in these Betterment data breach class action lawsuits? Let us know in the comments.
Tsou is represented by Alyssa Tolentino of Siri & Glimstad LLP and Gregory Haroutunian, M. Anderson Berry and Brook E. Garberding of Emery Reddy P.C. Huff and Grimseley are represented by Mark K. Svensson of Milberg PLLC and Daniel Srourian of Srourian Law Firm P.C.
The Betterment data breach class action lawsuits are Tsou v. Betterment LLC, et al., Case No. 1:26-cv-00444, and Huff, et al. v. Betterment, Case No. 1:26-cv-00364, both in the U.S. District Court for the Southern District of New York.
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