2021 Data Breach Sparks Class Action Lawsuit Against Community Loan Servicing

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Community Loan Servicing faces a proposed class action that alleges a data breach last year was caused by the company’s failure to implement reasonable cybersecurity procedures. 

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According to the 35-page lawsuit, an “unknown and unauthorized criminal actor” gained access to the Florida-based mortgage servicer’s network and exfiltrated consumer information sometime between October 27 and December 7, 2021. Per the suit, consumers’ names, Social Security numbers, dates of birth, email and physical addresses, financial data and other non-encrypted details provided to the company in connection with loan applications, modifications and general servicing were compromised in the “foreseeable” cyberattack. 

The lawsuit contends that Community Loan Servicing’s notice to data breach victims, which was sent only last month, on October 17, was deficient in that it failed to state whether the company was able to contain or end the threat or how the incident occurred. 

“All of this information is vital to victims of a data breach, let alone a data breach of this magnitude due to the sensitivity and wide array of information compromised in this specific breach,” the filing says. 

The lawsuit claims Community Loan Servicing data breach victims have suffered losses in the form of the present and imminent threat of fraud and identity theft, as well as out-of-pocket expenses, the loss of value of their time spent remedying or mitigating the effects of the cyberattack and the loss of value of their personal information. 

As the case tells it, the threat of a cyberattack was a “known risk” to Community Loan Servicing, who was thus on notice that failing to take steps to safeguard consumers’ information left it in a dangerous and vulnerable condition. 

“Due to Defendant’s inadequate security measures, Plaintiff and the Class Members now face a present, immediate, and ongoing risk of fraud and identity theft and must deal with that threat forever,” the suit stresses. 

The lawsuit looks to cover all consumers Community Loan Servicing has identified as among those who were impacted by the data breach, including those who received notice of the incident. 

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