T-Mobile Agrees To $500 Million Settlement Over Theft Of Sensitive Data

Wireless company T-Mobile has agreed to pay $350 million to customers, and $150 million to upgrade security, in order to settle a class-action lawsuit stemming from a data breach involving the theft of nearly 80 million people's information.

If accepted by U.S. District Court Judge Brian C. Wimes in Kansas City, Missouri, the settlement will resolve litigation dating to August of 2021, when T-Mobile confirmed that hackers had obtained full names, birthdates, Social Security numbers and driver's license information for millions of customers.

The company collects that type of sensitive information when running credit checks of people who apply for post-paid accounts.

When T-Mobile first disclosed the data breach, the company said hackers had obtained that sensitive data for around 40 million current customers and 7 million former customers. The court papers filed Friday said the data breach affected more than 76 million people.

The proposed settlement, which was unveiled in court papers filed Friday, also requires T-Mobile to spend $150 million to upgrade security by the end of 2023.

The company said on its website that has already taken steps to improve data security.

“Over the past year we have doubled down on our extensive cybersecurity program to enhance existing programs,” the company stated.

News of the data breach sparked calls for a crackdown on the collection and retention of sensitive data.

“If companies need to conduct a credit check, and they need the Social Security number to do that, that information should be collected in an encrypted fashion, and not stored,” S. Derek Turner, research director at advocacy group Free Press, said last year.

The proposed settlement would allow T-Mobile customers who lost money as a result of the data breach to apply for up to $25,000 in reimbursement.

Customers who didn't necessarily lose money, but took steps to protect themselves from identity theft, would be able to seek reimbursement of $25 an hour, or at a range equal to their hourly salary, whichever is greater.

Subscribers would also have the option of claiming a total of $25 (or $100 for California residents).

How much any individual could receive likely depends on how many people submit claims.

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