1st Franklin Financial Corporation Hit with Class Actions Over November 2022 Data Breach

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At least two proposed class actions have been filed against 1^st Franklin Financial Corporation in the wake of a November 2022 data breach that reportedly compromised the personal and financial information of more than 3,000 consumers.

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According to the lawsuits, the personal loan provider could have prevented the cybersecurity incident had it heeded “repeated” warnings urging companies to secure sensitive data in light of an uptick in cyberattacks in recent years. Instead, 1^st Franklin Financial chose to store consumers’ unencrypted information in an internet-accessible environment, allowing an unauthorized actor to infiltrate its network on November 17 of last year, the suits say.

The filings state that the stolen information includes consumers’ first and last names, Social Security numbers, bank account and routing numbers, addresses, earned wage figures and other information contained in W-2 forms.

“As a financial entity, Defendant has a statutory duty under federal and state statutes to safeguard Representative Plaintiff’s and Class Members’ data,” one case says. “Moreover, Representative Plaintiff and Class Members surrendered their highly sensitive personal data to Defendant under the implied condition that Defendant would keep it private and secure.”

To make matters worse, 1^st Franklin Financial Corporation, who has locations across Alabama, Georgia, Kentucky, Louisiana, Mississippi, South Carolina, Tennessee, Texas and Virginia, has acknowledged since 2018 in annual U.S. Securities and Exchange Commission (SEC) filings that its business is at risk of a data security breach that would compromise the confidential information of customers and employees, one complaint relays.

The filings say that 1st Franklin Financial Corporation began notifying affected individuals of the incident on January 10, almost three months after it discovered the breach. Per the suits, the letter left out details regarding the root cause of the incident, the vulnerabilities exploited by the perpetrator(s) and what actions the company will take to prevent a future cyberattack.

“As a result of this delayed response, Plaintiff and Class Members had no idea their [personally identifiable information] had been compromised, and that they were, and continue to be, at significant risk of identity theft and various other forms of personal, social, and financial harm, including the sharing and detrimental use of their sensitive information,” one lawsuit stresses, adding that victims will continue to face these risks for years to come.

The lawsuits look to cover anyone in the United States whose personally identifiable information was exposed to unauthorized third parties as a result of the data breach discovered by 1^st Franklin Financial Corporation on November 17, 2022.

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