Lender Faces $5 Million Lawsuit Over Recent Data Breach, Alleged Lack of Disclosure and Mitigation Assistance

Rochester, New York – Premium Mortgage Corp., a lender based in Rochester, is facing another class action lawsuit after a data breach exposed sensitive client information. The breach, which occurred over the summer, compromised the names and Social Security numbers of 10,835 clients. Now, one of the affected consumers, Toni Hyde, has filed a complaint against the company, seeking at least $5 million in damages.

The lawsuit alleges that Premium Mortgage’s disclosure regarding the breach was not specific enough to adequately assist affected individuals in mitigating the harm caused by the incident. Hyde claims that her Frontier Airlines credit card was accessed by an unknown party during the period between the attack and when Premium Mortgage notified its clients. However, Premium Mortgage asserts that it was unable to find any evidence of customers being harmed by the hack and has offered 12 months of free credit monitoring and identity protection services as compensation.

Premium Mortgage’s statement indicates that the cyber attack originated from an attachment sent via a government email from another state. The statement also mentions that the company promptly implemented multiple layers of analysis upon discovering the breach to determine the impact on its customers. However, neither the company’s disclosure nor the lawsuit provides further details regarding the nature of the cyber attack or the identity of the perpetrator, which is a common omission in these types of cases.

Hyde’s lawsuit requests that Premium Mortgage adhere to enhanced cybersecurity requirements, including the appointment of a third-party assessor for 10 years to conduct technical testing. To advocate for her case, Hyde has enlisted the representation of attorney Randi Kassan from the law firm Milberg Coleman Bryson Phillips Grossman, P.L.L.C. Interestingly, Kassan is also handling a pending class action lawsuit against Carrington Mortgage Services and vendor Alvaria, which experienced a hack in March.

Premium Mortgage, known for its 10 branches in New York and 2 in Florida, along with 76 sponsored mortgage loan officers, originated approximately $971 million in mortgage volume last year. This recent data breach has caught the attention of industry players, as other mortgage lenders like Loandepot, Mr. Cooper, and Planet Home Lending are also facing class action complaints regarding significant cyber attacks they disclosed in recent months.

While many of these cases have yet to reach potential jury trials, a larger lawsuit involving three servicers owned by Bayview Asset Management is currently in the discovery phase. The prevalence of cyber attacks in the mortgage industry underscores the need for heightened cybersecurity measures to safeguard the personal information of both lenders and clients.