AT&T reaches $177 million settlement for data breach, compensation expected

AT&T recently settled a $177 million lawsuit related to two data breaches that impacted its customers, both current and former. A U.S. judge approved the preliminary settlement that will resolve legal disputes regarding incidents that occurred in 2019 and 2024. Upon discovering the breaches, AT&T revealed that call and text message records of nearly all cellular customers were exposed in July 2024. Additionally, in March of the same year, the company disclosed an investigation into a data set that had surfaced on the “dark web.”

Despite these revelations, AT&T reiterated that it denies any culpability for the criminal activities that led to the breaches. The company stated to Reuters that the decision to settle the lawsuits was made to avoid costly and lengthy litigation processes, and to provide resolution for affected customers. This settlement marks a significant step towards addressing the issues arising from the data breaches.

Eligible customers impacted by the breaches stand to benefit from the settlement, with AT&T agreeing to pay varying amounts up to $2,500 or $5,000 based on the losses suffered by the individuals. The settlement will see the creation of two funds, with $149 million earmarked for those affected by the 2024 breach, and $28 million allocated to address losses resulting from the 2019 breach. Once direct losses have been compensated, any remaining funds will be distributed to customers whose personal information was compromised.

AT&T intends to initiate a notification program for the settlement commencing on August 4, with completion expected by October 17. Customers will have until November 18 to submit their claim forms, and a final approval hearing is scheduled for December 3. Payments to eligible parties are anticipated to commence early next year, pending final approval of the settlement terms.

The 2024 filing with the U.S. Securities and Exchange Commission detailed AT&T’s realization in April of the data breaches, highlighting the company’s commitment to transparency in addressing these incidents and providing affected parties with appropriate support. Despite the challenges posed by data breaches, AT&T aims to resolve these issues expediently and efficiently for the benefit of its customers.

In summary, the settlement agreement reached by AT&T in response to the data breaches underscores the company’s dedication to addressing the security concerns of its customers. By acknowledging the impact of the breaches and taking proactive steps to compensate affected individuals, AT&T aims to restore trust and uphold its commitment to data security and customer privacy.