Hatch Bank Hit with Class Action Over January 2023 Data Breach

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A proposed class action claims Hatch Bank failed to prevent a two-day data breach earlier this year that exposed tens of thousands of consumers’ names and Social Security numbers.

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The 38-page lawsuit says Clop, a notorious ransomware group, accessed Hatch’s computer network and the sensitive data stored therein between January 30 and 31, 2023, the case says. According to the filing, Hatch, who provides online bank services to other fintech companies, learned it had been hacked only after its internal file-sharing system supplier informed the defendant of a vulnerability on February 3.

The bank then waited until February 23 to notify affected individuals of the breach, the suit relays.

The complaint contends that Hatch made itself an “easy target” for the cybercriminals by failing to employ appropriate safeguards to protect consumers’ sensitive information, comply with industry-standard cybersecurity practices, properly train employees on data security protocols, detect unauthorized access to its systems and timely notify those whose information was compromised.

The plaintiff, a Texas resident, says she had no relationship with Hatch but received a notice letter from the company stating that it had collected her data when she applied for a loan through Wisetack, Inc.

“Hatch’s breach differs from typical data breaches because it affects consumers who had no relationship with Hatch, never sought one, and never consented to Hatch collecting and storing their information,” the complaint relays, adding that the company had sourced the information stored in its systems from third parties.

Like other victims, the plaintiff now faces an increased risk of identity theft and must spend considerable time, money and effort monitoring her accounts to protect herself from the potential misuse of her data, the complaint stresses.

The plaintiff claims that unauthorized actors, in the wake of the data breach, have used her information to make a fraudulent online purchase and create an Ulta Beauty Credit card from Comenity bank. The woman has also experienced a noticeable increase in spam texts and phone calls, the case says.

Per the filing, Hatch was required under state and federal laws to protect consumers’ personal information. The suit further claims that Hatch “knew or should have known” the tactics that organizations like Clop employ, especially since it has apparently breached over 130 organizations.

The lawsuit seeks to represent anyone in the United States whose personally identifiable information was compromised in the data breach disclosed by Hatch Bank in February 2023.

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