The Legal and Financial Consequences of a Data Security Breach

 Posted on November 07, 2022 in Business Law

Almost on a weekly basis, the news is filled with another company that has suffered a data breach. And the financial repercussions of a breach for a business can be devastating. Just last week, T-Mobile announced a $350 million settlement for a 2021 cyberattack that exposed millions of their customers’ personal information. The company has identified approximately 76 million customers who were affected by the breach.

Although the company is taking a significant financial hit with the settlement, given the size of the corporation, it is likely its financial standing will not be affected in the long run. Unfortunately, for many smaller businesses, a data security breach and the financial penalties that can result can be disastrous.

Hackers Wreaking Havoc

Under the law, all businesses owe a duty of care to their customers to protect their personal information. When hackers steal that information in a data security breach, it can and does cause many issues for those whose information is stolen. Hackers can apply for credit cards in customers’ names, access their financial accounts, and even apply for government benefits.

Unfortunately, despite the number of safeguards a company puts in place, data breaches still occur. What is also unfortunate is that despite taking the necessary precautions, a company is still legally responsible for damages customers suffer.

What to Do If Your System Has Been Breached

When a data breach has occurred, the reality for the company is that the damage is done. The hackers have gained entry and stolen all the information. Although the financial impact of a breach can be overwhelming - the average cost of a data breach is $4.35 million – the impact on a company’s reputation can be even more costly. It is the steps the company takes once that breach is discovered that are critical to how significant the ramifications will be. This is why it is imperative that the company alert law enforcement about the breach and not try to hide it from the public.

Data Breach Lawsuits

Once word gets out about the breach, the company should prepare for potential lawsuits filed by customers. The best way to prepare and defend against any legal action is by contacting and working with a skilled business attorney who can provide the legal guidance needed to navigate a potentially disastrous situation. Your attorney will guide you through the steps of notifying customers, taking the steps to hinder any future breaches, and defending your company against any personal and/or class action lawsuits.

Call a Broward County Business Lawyer Today

If your company has suffered a data security breach, do not delay in contacting a skilled Fort Lauderdale, FL business law attorney. Call The Elliot Legal Group, P.A. at 754-332-2101 to schedule a confidential consultation.

Sources:

https://money.yahoo.com/data-breach-prevent-195310812.html

https://www.cnet.com/personal-finance/t-mobiles-350-million-data-breach-settlement-see-if-youre-eligible-for-a-payment/