401(k) Participant Drops Data Breach Suit Against Transamerica

(PlanAdviser) - A retirement plan participant has dropped a lawsuit filed against Transamerica Retirement Solutions alleging that the retirement plan provider failed to exercise reasonable care in securing and safeguarding personally identifiable information—including names, addresses, Social Security numbers and retirement fund contribution amounts.

The class action complaint was filed in December 2021 on behalf of individual participants in plans served by Transamerica who allegedly had their PII accessed by unauthorized parties after a data breach that occurred around June 2021. The plaintiff accused Transamerica of waiting four months to make the plaintiff aware of a data breach that exposed personal information.

On Friday, the plaintiff filed a voluntary motion to dismiss the case in the U.S. District Court for the Southern District of New York without further argument. The filing states that the court “permits voluntary dismissal of an action by the plaintiff ‘without court order’ by filing ‘a notice of dismissal before the opposing party serves either an answer or a motion for summary judgment.’”

Cyber fraud should be a focus area for retirement plan participants, plan sponsors and recordkeepers as criminals get more advanced, according to industry experts. Some cybersecurity professionals have recently warned that increased personalization in financial services makes people more susceptible to fraud stemming from use of their personal information.

The original complaint claimed that, for years following the data breach, Transamerica retirement plan participants who were affected would experience “a slew of harms as a result of the defendant’s ineffective data security measures.” It alleged that the plaintiff had already experienced multiple fraudulent purchase requests and spam calls in his name since the data breach, which the lawsuit said would negatively affect his finances in the future.

In a statement to PLANSPONSOR at the time, Transamerica said: “Transamerica has become aware of a lawsuit filed recently in the Southern District of New York that asserts claims against our retirement operations. The allegations in the lawsuit are inaccurate and misleading. At no time did unauthorized individuals gain access to Transamerica’s systems as the lawsuit suggests. The allegations that Transamerica failed to meet legal or regulatory obligations are false. Transamerica is proud of the services we provide to our retirement plan clients, and we will vigorously defend against this lawsuit.”

By Alex Ortolani
March 7, 2023


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