‘Reckless’ Pawn Shop Companies Face Class Action After Data Breach Exposes 500K

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Pawn America Data Breach Class Action Lawsuit Overview:

• Why: The payday lending companies failed to protect customers’ private information in an expansive data breach of their networks in October 2021.
• Who: A customer filed a class action lawsuit against Pawn America Minnesota, LLC, Payday America Inc., and PAL Card Minnesota, which operate pawnshops and payday lending stores in Minnesota and Wisconsin.
• Where: The class action lawsuit was lodged in Minnesota federal court.

Pawn shops and payday lending companies allowed a hacker to make off with the personal information belonging to hundreds of thousands of their customers, according to a new class action lawsuit. 

Customer Megan Murillo filed the lawsuit against Pawn America Minnesota and its affiliates in response to a data breach that exposed the private identifying information (PII) of their customers.

On or around Sept. 28, 2021, the companies’ networks experienced a ransomware attack that was discovered by Pawn America on Oct. 3, 2021, alleges the class action. The breach exposed at least 530,000 customers’ full names, Social Security numbers, driver’s license numbers, passport numbers, dates of birth, and financial account information.

Murrillo made in-person transactions with one or more of the defendants which required her to disclose PII. Murillo claims she did not receive notice that her PII was accessed and compromised until November. 

Murillo seeks to represent a nationwide Class of all natural persons residing in the United States whose PII was compromised in the data breach initially discovered by the defendants on or about Oct. 3, 2021.

The class action lodges accusations of negligence, breach of implied contract, and unjust enrichment.

Pawn America ‘Reckless’ With Customers’ Private Info, Class Action Says

Customers must disclose their PII to Pawn America to make any transactions. Customers reasonably expect Pawn America to keep their information confidential and secure, the complaint argues. Across their websites, the defendants promise to “provide confidentiality and adequate security for customer data.” 

Instead, Pawn America allegedly maintained customers’ PII “in a reckless manner,” leaving information unencrypted in a “vulnerable” computer network. 

Pawn America’s data security practices failed to comply with industry standards, Federal Trade Commission guidelines, and US Cybersecurity & Infrastructure Security Agency recommendations, according to the complaint. Pawn America could have implemented awareness and training programs, firewalls, application whitelisting, and preventative software programs. 

Class Action Claims Customers at Risk of Identity Theft and Fraud

After the breach, Pawn America informed affected customers that the “cybercriminals… threatened to leak the information which could make it available to other cybercriminals,” according to the class action lawsuit.

Pawn America then allegedly encouraged customers to protect their information by placing fraud alerts or security freezes on their credit files. However, Pawn America has not offered affected customers any identity theft monitoring services or assistance, according to the complaint. Instead, customers must pay out of pocket for any such services.

The complaint argues that due to Pawn America’s inadequate safeguarding of customers’ PII, affected customers face an increased risk of identity theft and fraud. Customers’ PII may be used to open new financial accounts, take out loans, obtain medical services, target further phishing attacks, and file fraudulent tax returns. 

Murillo seeks compensatory damages, reimbursement of out-of-pocket costs, credit monitoring and identity restoration services paid for by Pawn America, and injunctive relief including improvements to Pawn America’s data security systems and yearly audits.

See if you qualify to join a data breach class action lawsuit investigation here (links to paid advertising).

The plaintiff is represented by Bryan L. Bleichner, Jeffrey D. Bores, and Christopher P. Renz of Chestnut Cambronne PA and David K. Lietz and Gary M. Klinger of Mason Lietz & Klinger LLP.

The Pawn America Data Breach Class Action Lawsuit is Murillo v. Pawn America Minnesota, LLC, et al., Case No. 0:21-cv-02574, in the US District Court for the District of Minnesota

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