A moment of inattention by one of its employees, and Seagate stands to lose tens of millions of dollars. No, the company was not the victim of a BEC scam – instead, it has been dragged to court by its own employees.
In 2016, the company handed over current and past employees’ W-2 forms to scammers, who then used the information to file fraudulent tax returns in their names, obtain lines of credit using their Social Security numbers, and so on.
A group of affected employees decided, therefore, to file a class action suit against the company, and apparently they’ve now reached an out-of-court settlement.
The proposed Seagate employee info theft settlement
“Seagate will offer Employees and Third Parties up to two years of Experian’s ProtectMyID identity theft protection plan at no cost. In addition, Seagate will reimburse all class members for documented out-of-pocket costs as a result of the Data Incident that are not otherwise reimbursable through the ProtectMyID plan, up to $3,500 per class member,” the motion to approve the settlement says.
“Plaintiffs estimate that the Experian ProtectMyID protection is valued at approximately $5.75 million to the Settlement Class. Plaintiffs further estimate that Seagate’s ‘backstop’ protection offers potential coverage of more than $42 million to protect a class estimated at 12,000 individuals.”
The affected employees say that apart from providing two years of free identity theft protection services to them, the company has no offered any compensation to third-party victims (the scammers also filed joint tax returns for some of the affected employees’ adult dependents), has not provided them with assistance in dealing with the IRS or state tax agencies, nor offered to reimburse employees for the costs – current and future – incurred as a result of falsely filed tax returns.
Also, they complained that the offered ProtectMyID service does nothing to protect against identity theft, but just provides assistance after identity theft has been discovered.
“For the rest of their lives, Plaintiffs and the class members will bear a heightened risk of all manners of identity theft,” the employees’ lawyers noted.
“As a result of Seagate’s negligence, Plaintiffs and the class members have suffered and will continue to suffer damages and injury including, but not necessarily limited to: a) out-of-pocket costs associated with addressing false tax returns filed with the IRS and state tax agencies; b) increased future out of pocket costs in connection with preparing and filing tax returns; c) out-of-pocket costs associated with procuring identity protection and restoration services; d) in the event of future identity theft, out-of-pocket costs associated with repairing credit, reversing fraudulent charges, and other harms; and e) lost productivity and enjoyment as a result of time spent monitoring, addressing and correcting future consequences of the Data Breach.”
The settlement still has to be approved by the judge.