Popular Payment Platform Sued for Negligence

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Following a major data breach, PayPal is being sued in federal court for failing to safeguard costumer information.

The pending lawsuit accuses online payments giant PayPal of failing to adequately safeguard the personal information of its users, leaving them vulnerable to identity theft and related ills at the hands of the unidentified perpetrators of a data breach that occurred late last year.

Nearly 35,000 people were affected by the cyberattack, which used previously compromised usernames and passwords to gain access to PayPal’s systems. PayPal’s notice to users whose personal information was compromised indicated that the company first learned of the attack just before the holidays in 2022, and that the attack was eventually determined to have happened between December 6 and December 8, according to reports by csoonline.com.

The notice was sent out January 19, and said that there was “no evidence” that the compromised logins were taken from PayPal’s systems. Rather, it’s likely that username and password data gleaned from other cyberattacks were used to attempt to log in to PayPal accounts, which succeeded in some cases where users recycled their passwords.

According to Robert Dillard, a legal analyst, claims for losses in data breach incidents faced an “uneven path” forward in federal courts last year.

“2023 will almost certainly see plaintiffs and their lawyers use creative arguments to pursue relief under common-law claims,” he said. “However, the chances of success for those claims will be extremely dependent on the facts of each case as they come before a court system that has shown skepticism.”

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