Pathward class action claims company failed to safeguard personal info prior to data breach

Pathward class action lawsuit overview:

• Who: Plaintiff Jacob Kent filed a class action lawsuit against Pathward NA, Ipswitch Inc. and Progress Software Corporation.
• Why: The defendants allegedly failed to adequately safeguard customers’ sensitive data prior to a May 2023 Pathward data breach.
• Where: The Pathward class action lawsuit was filed in South Dakota federal court.

Pathward failed to adequately protect consumers’ personal information, leaving it vulnerable to a data breach, according to a Pathward class action lawsuit filed Oct. 26 in South Dakota federal court.

Plaintiff Jacob Kent filed the Pathward class action lawsuit against Pathward NA, Ipswitch Inc. and Progress Software Corp.

Kent explains that Pathward is a financial institution that provides a debit card called the H&R Block Emerald Card. 

In May 2023, Ipswitch and Progress were reportedly affected by a data breach that affected their MOVEit Transfer and MOVEit Cloud software. As a result, unauthorized persons were able to access files containing nearly 800,000 Pathward customers’ personally identifiable information (PII), the Pathward class action lawsuit alleges.

Pathward class action says defendants failed to adequately protect PII

Ipswitch and Progress tout their MOVEit products and services as being “capable of safely transferring sensitive information,” the Pathward class action lawsuit says. However, they allegedly failed to implement adequate safeguards to protect this data from unauthorized access and disclosure.

The information allegedly compromised in the Pathward data breach included customers’ names, birthdates, addresses, Social Security numbers, drivers’ licenses, phone numbers, email addresses and debit card information.

Kent says he had to provide his PII to Pathward in order to get an H&R Block Emerald Card. If he had known the defendants would not adequately protect the PII in their possession, he says, he would not have provided his PII to Pathward.

As a result of the Pathward data breach, Kent is allegedly faced with “a substantial and imminent risk of identity theft, the wrongful disclosure and loss of confidentiality of his highly sensitive PII, deprivation of the value of his PII and overpayment for services that did not include adequate data security.”

Kent is suing on behalf of himself and a proposed class of other H&R Block Emerald Card holders who were affected by the Pathward data breach. 

More than 600,000 Medicare beneficiaries may have been affected by the MOVEit data breach, along with thousands of others who may have been affected by data breaches over the summer.

Were you affected by the Pathward data breach? Tell us about your experience in the comments.

Kent is represented by Edward S. Hruska III of Bachand & Hruska PC and Ben Barnow and Anthony L. Parkhill of Barnow and Associates PC.

The Pathward data breach class action lawsuit is Jacob Kent v. Pathward NA, et al., Case No. 4:23-cv-04177-KES, in the U.S. District Court for the District of South Dakota.

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