PayPal class action claims company failed to safeguard customer information prior to data breach

PayPal data breach class action overview: 

• Who: Two PayPal users are suing the e-commerce company. 
• Why: The plaintiffs allege PayPal was negligent in the storage of their information, leading to a data breach.
• Where: The PayPal data breach class action was filed in a California federal court.

PayPal was negligent in its storage of customers’ sensitive personal information, resulting in a data breach that exposed the personal data of tens-of-thousands of users, a new class action lawsuit alleges.

Plaintiffs Ashley Pillard and Destiny Rucker filed the class action lawsuit against PayPal Inc. on March 2 in a California federal court, alleging violations of state and federal consumer laws. 

According to the lawsuit, PayPal failed to properly secure and safeguard its customers’ sensitive records from hackers, leading to a major cyber attack. 

In January, PayPal notified its users of a data breach that exposed the personal data of nearly 35,000 users. 

According to the lawsuit, on Jan. 18, PayPal filed official notice of a hacking incident with the Office of the Maine Attorney General and sent out data breach letters to individuals whose information was compromised.

Based on the notice filed by the company PayPal first detected unusual activity on some of its computer systems on Dec. 20, 2022. In response, the company conducted an investigation. PayPal’s investigation revealed that an unauthorized party had access to certain company files between December 6, 2022 and December 8, 2022.

PayPal would have discovered breach earlier if it wasn’t negligent with data security, lawsuit alleges

The information compromised in the data breach included highly sensitive data that represents a “gold mine for data thieves,” the lawsuit states. 

It included names, addresses, Social Security numbers, individual tax identification numbers, and/or dates of birth as well as additional personally identifiable information that PayPal collected and maintained.

PayPal and its employees failed to properly monitor the computer network and systems that housed the private information, the plaintiffs allege. Had PayPal properly monitored its networks, it would have discovered the breach sooner, they say.

“Plaintiffs and Class Members were, and continue to be, at significant risk of identity theft and various other forms of personal, social, and financial harm,” the plaintiffs state. “The risk will remain for their respective lifetimes.”

The plaintiffs seek to represent a nationwide class of people who had their private information stolen as a result of the data breach, plus a Nebraska subclass and Texas subclass.

The plaintiffs are suing for negligence, breach of contract and violation of state consumer laws, and seek damages, reimbursement of out-of-pocket costs, and injunctive relief including improvements to PayPal’s data security systems, future annual audits, and adequate credit monitoring services funded by PayPal.

What do you think of the allegations against PayPal in this case? Let us know in the comments! 

The plaintiff is represented by Kyle McLean, Mason Barney and Steven D. Cohen of Siri & Glimstad LLP. 

The PayPal class action lawsuit is Ashley Pillard et al., v. PayPal Inc., Case No. 5:23-cv-00936 in the U.S. District Court for the Northern District of California.

Read About More Class Action Lawsuits & Class Action Settlements:

• PayPal data breach affects thousands of users
• Envision Credit Union data breach class action settlement
• Indianapolis Housing Authority class action claims agency failed to safeguard user data
• Nevada casino sued over data breach