Defendants Move to Dismiss Retirement Account Cyber-Theft Case

(PlanSponsor) - The Colgate-Palmolive employee relations committee, plan recordkeeper Alight Solutions and custodian Bank of New York Mellon Corporation have all filed to dismiss an Employee Retirement Income Security Act lawsuit brought by Paula Disberry, an employee of Colgate-Palmolive from 1993 to 2004.

Disberry’s complaint states that last September, she was informed after unsuccessfully trying to log in to her account that her entire balance of $751,430.53 had been withdrawn in one lump sum. 

The total was taxed and penalized for early withdrawal, since Disberry was 52 at the time. BNY Mellon sent a check for $601,144.42 to an address in Las Vegas, though Disberry has been a resident of South Africa since 2008.

She charges that Alight missed several red flags. The fraudsters called Alight and asked to change Disberry’s contact info and address under her account. Alight then sent a temporary PIN to Disberry’s address in South Africa, which the fraudsters managed to intercept. Alight never contacted the previous phone number or email listed when they were changed, according to the suit, and never followed up when the fraudsters tried to withdraw the entire balance at once, though Disberry was younger than 59.5 years old and therefore subject to an additional tax penalty.

The thieves also tried to take Disberry’s balance from another retirement account managed by the Momentum Gibraltar Pension Plan, but failed due to their security measures, which included a phone and email alert to previously listed contacts, as well as a call to her financial adviser.

Last Thursday, the three defendants moved to dismiss the case. They cited Federal Rules of Civil Procedure 12(b)(6), which is a motion to dismiss on the basis that there is a “failure to state a claim upon which relief can be granted” on the part of the plaintiff. This motion asserts that even if everything the plaintiff alleges is factually true, it is insufficient to justify a lawsuit.

The legal teams representing the three defendants did not respond to a request for comment.

By Paul Mulholland
September 21, 2022


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