Fidelity agrees to $2.5M class action settlement over alleged data security failure

Fidelity class action settlement overview:

• Who: Fidelity Investments reached a proposed $2.5 million settlement with plaintiffs in a data breach class action lawsuit.
• Why: Plaintiffs claim Fidelity Investments failed to protect the personal and financial information of more than 155,000 account holders during a 2024 cybersecurity incident.
• Where: The preliminary approval of the settlement was granted in Massachusetts federal court.

A Massachusetts federal judge granted preliminary approval to a proposed $2.5 million class action settlement resolving claims that Fidelity Investments failed to adequately safeguard the personal information of more than 155,000 account holders during a 2024 data breach.

U.S. District Judge Leo T. Sorokin approved the settlement for preliminary purposes, finding that the proposed nationwide class appears to present common legal and factual questions and represents a fair and efficient way to resolve the dispute.

According to the class action lawsuit, cybercriminals gained access to Fidelity’s computer systems during a targeted attack on Aug. 17, 2024. A subsequent forensic investigation allegedly determined that hackers infiltrated Fidelity’s network and accessed sensitive data files containing customers’ financial information.

The plaintiffs claim Fidelity’s computer network was inadequately protected, allowing unauthorized parties to obtain financial account numbers and routing numbers belonging to affected customers.

The complaint further alleges Fidelity detected suspicious activity indicating a breach between Aug. 17 and Aug. 19, 2024, but did not notify affected customers until Oct. 10, 2024. Plaintiffs argue the delay left customers vulnerable to identity theft and fraud.

Settlement would provide payments and identity protection

Under the proposed settlement, class members who submit valid claims may receive reimbursement for documented losses tied to the data breach, up to $5,000 per claim.

In addition, affected customers will be eligible for two years of credit monitoring and identity theft protection services, which include up to $1 million in fraud and identity theft insurance coverage. Class members may also receive a pro rata cash payment estimated to be around $100.

Members of a California subclass may receive an additional $50 payment under the California Consumer Privacy Act.

What do you think of this Fidelity class action settlement? Let us know in the comments.

The plaintiffs are represented by Amanda Brooke Murphy of the Murphy Law Firm and Lori Feldman of Hecht Partners LLP.

The Fidelity data breach class action lawsuit is Gluck, et al. v. Fidelity Investments, Case No. 1:24-cv-12601, in the U.S. District Court for the District of Massachusetts.

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