T-Mobile has reached an $350 million settlement agreement for a class action lawsuit over cyberattack that resulted in loss of private data of millions of customers.
In August 2021, hackers infiltrated the telecom company in a “highly sophisticated cyberattack” that exposed data from more than 40 million former or prospective customers who had applied for credit with the company, as well as 7.8 million current postpaid subscribers.
“On July 22, 2022, T-Mobile US, Inc. entered into an agreement to settle a consolidated class action lawsuit asserting claims related to a 2021 criminal cyberattack involving unauthorized access to the Company’s systems in which certain information about a number of the Company’s current, former, and prospective customers was compromised,” a statement contained in the SEC filing said.
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The filing said in addition to the settlement agreement, also agreed to make an additional $150 million investment in data security and related technologies this year and next.
GeekWire who spotted the filing reported among other things, that the proposed class consists of more than 76 million customers, according to a copy of the proposed settlement filed in the U.S. District Court for the Western District of Missouri, where several related cases were consolidated. The $350 million payout will fund claims submitted by class members, plaintiffs’ legal fees, and administrative costs, the settlement file said.
If the court approves the settlement, it “will resolve substantially all of the claims brought by the Company’s current, former and prospective customers who were impacted by the 2021 cyberattack,” T-Mobile said in its SEC filing.
The company continues to cooperate with various regulators who are separately investigating the incident, according to a T-Mobile spokesperson.
T-Mobile issued a statement Friday about the settlement on its website. “As we continue to invest time, energy, and resources in addressing this challenge, we are pleased to have resolved this consumer class action filing,” the company said.
According to the SEC filing, T-Mobile expects to record a pre-tax charge of about $400 million in the second quarter as a result of the settlement. The filing notes that the charge and the $150 million investment in security were anticipated in its prior financial guidance to investors.
Final court approval of the terms of the settlement is expected as early as December 2022 but could be delayed by appeals or other proceedings. The Company has the right to terminate the agreement under certain conditions, the filing further said.