Fidelity Reaches $2.5M Settlement Over Data Breach Affecting 155,000 Customers

Fidelity Investments has reached a proposed $2.5 million settlement in a class-action lawsuit concerning an alleged data breach. 

The settlement proposal received preliminary approval on Monday in the Massachusetts federal court.

The lawsuit claims that more than 155,000 account holders had their personal and financial information compromised during a cybersecurity incident in 2024. 

The breach reportedly allowed unauthorized access to Fidelity’s systems, exposing sensitive customer data, including names, social security numbers, financial account information, and driver’s license information.

According to the complaint, the breach occurred between August 17 and August 19, 2024, but affected customers were not notified until October 10, 2024. This delay allegedly left customers vulnerable to identity theft and fraud, the plaintiffs argue.

Under the terms of the settlement, class members who file valid claims could receive compensation for losses related to the breach, with a cap of $5,000 per claim. 

Additionally, affected customers are eligible for two years of credit monitoring and identity theft protection services, which include insurance coverage up to $1 million.

Class members may also receive a pro rata cash payment, estimated at around $100, and those in a California subclass could receive an extra $50 under state privacy laws. 

"Fidelity takes its responsibility to serve customers and safeguard information seriously. We remain fully committed to the security of our clients' accounts and personal information. Litigation can involve a considerable amount of time and resources. Settlement is one way to avoid this for both parties. A legal settlement is not an admission of liability,” a spokesperson for Fidelity told Benzinga in a statement.

The court will determine whether to grant the Fidelity settlement final approval on July 9 hearing.

Compensation will only begin to be distributed to class members after final approval has been granted and any appeals have been resolved.

Photo: Piotr Swat via Shutterstock