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May 25, 2023

UPDATED: Class action filed against Webster Bank over data breach

PHOTO | COSTAR A Webster Bank branch in New Haven at 894 Whalley Ave.

A class action lawsuit against Stamford-based Webster Bank claims nearly 200,000 customers’ personal information was exposed in a data breach, putting them at risk for harm through identity theft and fraud.

The lawsuit was filed May 15 in U.S. District Court in New Haven and names Webster Financial and Webster Bank as defendants.

The named plaintiffs include bank customers Justin Friar, Paul Courey, Rayna Fedorczyk and Maria Melo and all others impacted by the breach. The case has been assigned to Judge Janet C. Hall. 

The lawsuit alleges 191,563 bank customers were impacted, including 153,754 customers who live in Connecticut. It accuses Webster Bank of negligence and breach of contract for allegedly failing to ensure adequate security measures were in place to prevent customers’ private information from being disclosed. It also asserts that the bank failed to notify customers in a timely fashion.

Attorney Ian Sloss of Silver Golub & Teitell, who is representing the plaintiffs, could not be reached for comment. The law firm announced in April it was investigating a potential class action in connection with the data breach.

Elaine K. Ficarra, a spokeswoman for Webster Bank, said via email Thursday, "We do not comment on pending litigation. Webster has communicated with regulators and affected Webster clients. Webster’s own systems have not been compromised nor were they impacted by this incident. We apologize for the inconvenience this caused our clients."

The lawsuit claims information such as customers’ names, bank account numbers and Social Security numbers were compromised. It alleges Webster’s data protection security program and monitoring of vendors entrusted with customer information were “all woefully inadequate.”

According to the lawsuit, Webster Bank retained Guardian Analytics Inc. to provide fraud detection services.

The lawsuit alleges that on Jan. 26, 2023, Webster first learned that, beginning on Nov. 27, 2022, an unauthorized third party obtained customers’ personal information by accessing Guardian Analytics’ systems. The unauthorized access continued undetected for nearly two full months, ending around Jan. 22, 2023. The stolen customer data has already been found for sale on the dark web, according to the lawsuit. 

The litigation alleges that while Webster learned of the data breach in January, it didn’t begin notifying customers that their personal information had been compromised until April 10, depriving them of an opportunity to take steps to protect themselves and minimize the impact of the breach.

The lawsuit asserts the plaintiffs are now at increased risk of identity theft and fraud, causing them anxiety and emotional distress. It seeks damages and injunctive relief, including requiring the bank to adopt measures to safeguard customers against future breaches.

Elizabeth Benton, a spokesperson for Attorney General William Tong’s office, confirmed Thursday that Tong’s office has been in contact with Webster Bank and is looking into the circumstances surrounding the data breach. Benton indicated it is “too soon to comment” on any potential enforcement action.

A separate class action lawsuit stemming from the data breach was filed in U.S. District Court in Connecticut in early May. That action was filed by law firms Turke & Strauss LLP in Wisconsin and Attorney Kelly Fitzpatrick of Bridgeport-based firm Koskoff, Koskoff & Bieder.

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