T-Mobile has agreed to fork over $350 million to customers following a massive data breach last year that resulted in a class action lawsuit. The company made the disclosure in a securities filing on Friday. But if you were among the millions of T-Mobile victims caught up in this embarrassing incident? Don’t start celebrating at the thought of a huge T-Mobile settlement check coming your way.
The company’s filing doesn’t actually specify how much individual customers can expect. The amount could be as low as $5-$10, according to one estimate. That’s just based on similar settlements in the past. The T-Mobile filing says the customers can’t request more than $2,500 each.
T-Mobile settlement check
In a new US Securities and Exchange Commission filing, the carrier said it had agreed to an aggregate payout of $350 million. That money will, of course, fund claims submitted by class members. But it will also pay attorney’s fees, plus the cost of administering the settlement.
Needless to say, both of those two items will require far more from the settlement kitty than individual customers are getting. Moreover, for context, the entire settlement represents less than half of 1 percent of T-Mobile’s 2021 revenue.
“If approved by the court,” the T-Mobile filing reads, “the Company anticipates this settlement of the class action, along with other settlements of separate consumer claims that have been previously completed or are currently pending, will resolve substantially all of the claims brought by the Company’s current, former and prospective customers who were impacted by the 2021 cyberattack.
“In connection with the proposed class action settlement and the separate settlements, the Company expects to record a total pre-tax charge of approximately $400 million in the second quarter of 2022.”
2021 data breach
The reason a T-Mobile settlement check was even necessary in the first place? It stems, as we noted above, from a data breach reported last year. A hacker claimed to have stolen a huge tranche of personal data from the carrier’s customers.
As we wrote at the time, the carrier quickly investigated the hacker’s claims. The company “immediately closed the access point” that the hacker used to access its servers. But T-Mobile was then, unfortunately, able to verify that hackers had, in fact, stolen a subset of customer data. Some of that data contained personal information like customer names, dates of birth, and SSNs.
Here are a few of the key findings that T-Mobile shared with its customers in a news release:
Our preliminary analysis is that approximately 7.8 million current T-Mobile postpaid customer accounts’ information appears to be contained in the stolen files, as well as just over 40 million records of former or prospective customers who had previously applied for credit with T-Mobile.
Near the end of the release, T-Mobile revealed a very important piece of information. The hack exposed the names, phone numbers, and account PINs of around 850,000 active T-Mobile prepaid customers. T-Mobile quickly reset those PINs and alerted customers about that reset.
Bottom line, though: The T-Mobile settlement here sounds more like a win for lawyers than anyone else.
