Fidelity Investments has agreed to a $2.5 million class action settlement to resolve claims stemming from a data breach that occurred in August 2024. The breach, which lasted from August 17 to 19, allowed a third party to access sensitive personal information including names, Social Security numbers, financial account details, and driver's license numbers.
The settlement, announced Wednesday, offers affected customers payouts of up to $5,000. However, Fidelity does not admit any wrongdoing as part of the agreement. The company said it is settling to avoid further litigation costs and disruption.
Over 77,000 customers were impacted by the breach, according to court documents. The class action lawsuit alleged that Fidelity failed to adequately protect customer data, leading to the unauthorized access.
This is not the first time Fidelity has faced legal scrutiny over data handling. Earlier this year, the company halted donor-advised funds for the Southern Poverty Law Center after a Department of Justice fraud indictment, raising questions about its compliance practices.
Class members who can demonstrate financial losses directly tied to the breach—such as identity theft expenses, fraud, or credit monitoring costs—may be eligible for compensation. The settlement also covers up to three hours of lost time at $25 per hour for dealing with the breach's aftermath.
To qualify, affected customers must submit a claim form with supporting documentation. The deadline for filing claims has not yet been set, but the settlement is pending final court approval.
Data breaches in the financial sector have become increasingly common. In a similar case, Apple agreed to a $250 million settlement over delayed AI features that may pay iPhone users up to $95, highlighting the growing legal risks for tech and financial firms.
Fidelity has not disclosed whether it has strengthened its cybersecurity measures since the breach. The company continues to manage over $4 trillion in client assets, making data security a critical concern for its millions of customers.
The case is In re: Fidelity Investments Data Breach Litigation, filed in the U.S. District Court for the Southern District of New York. A final approval hearing is expected later this year.
