Pressure Mounts on Patelco, So Do the Class Action Lawsuits

With pressure mounting on the $9.7 billion Patelco Credit Union as it struggles to restore its banking systems that were shut down on June 29 by a ransomware attack, the number of class action lawsuits filed in federal and state courts are climbing.

In addition to Patelco members Josh Warren and Eileen Poluk, who each filed separate federal class action lawsuits last week against the Dublin, Calif.-based credit union, another member, Sioban Gallagher, filed a third class action lawsuit on Tuesday in U.S. District Court in San Francisco.

What’s more, four Patelco members – Shawn Kent, Kaaron Warren, Wily Lee and Carl Cordell – also filed separate class action lawsuits in California’s Alameda County Superior Court this week and last week.

All of the class action lawsuits claimed that the ransomware attack allegedly exposed and compromised the personally identifiable information of Patelco’s members – names, dates of birth, addresses, Social Security numbers, driver’s license numbers – and their account information, which may substantially increase members’ risks to fraud and identity theft. The lawsuits also alleged that Patelco failed to follow appropriate protocols, policies and procedures regarding the encryption of data that compromised members’ private information.

On June 29, Patelco informed its members in an email notice that a “serious security incident” occurred and then later confirmed it was a ransomware attack that shut down its banking systems. On July 2, Patelco said in a Q&A there was no evidence, at that time, that the ransomware attack affected or compromised mobile and online banking user IDs, passwords and account information. The credit union also has repeatedly said that members’ money is safe and secure, reminding them that all of their accounts are insured by the NCUA. The credit union serves more than 500,000 members.

In a Tuesday update from Patelco President/CEO Erin Mendez, she assured members that the credit union’s infrastructure is stable, secure and that it is making positive momentum daily toward the final goal of getting back to business.

“In addition, we are working around the clock to catch up, which includes processing transactions (e.g., recording ACH and check transactions to your account) and those recorded in-person at a Patelco branch,” she wrote on PCU’s Security Incident Updates & Information Center. “We expect to make 50% progress on this task by tomorrow (Wednesday) and are expecting to be completely caught up by the end of the week. Once that happens, we will be able to confirm the date when you will be able to access your accounts.”