AT&T Faces $177 Million Cost in Wake of Data Breaches

AT&T has agreed to a $177 million settlement to resolve lawsuits stemming from two major data breaches that exposed sensitive customer information. A federal judge has granted preliminary approval, with a final hearing scheduled for December 3. As cyberattacks increasingly target consumer data at a massive scale, the case signals the financial and reputational risks that enterprises face when their defenses fail.

Massive Breach Impacts 73 Million Customers

AT&T, one of the largest telecommunications providers in the U.S., is preparing to pay $177 million to settle class action claims related to two separate cybersecurity breaches in 2024. The first breach, disclosed in March, involved the leak of a dataset on the dark web containing sensitive personal data of up to 73 million current and former customers. The second breach, announced in July, exposed six months of call and text message records from 2022. The settlement includes $149 million for the first breach and $28 million for the second.

The compromised data included customer names, phone numbers, email addresses, Social Security numbers, birth dates, account numbers, and passcodes. Unauthorized individuals exploited weaknesses in AT&T's data storage and monitoring systems to extract this information. Although AT&T hasn't accepted fault, it is settling the case to avoid extended litigation. The consolidated lawsuits in the U.S. District Court for the Northern District of Texas claim that the company failed to implement adequate data security and delayed notifying affected customers.

Financial and Strategic Implications

In addition to the $177 million settlement, AT&T may incur further expenses from regulatory fines, response to breaches, customer support, and remediation efforts. As data breach losses continue to rise across the industry, these costs underscore the significant financial risks associated with inadequate cybersecurity practices. The FBI reported that cybercrime losses exceeded $16 billion in 2024, marking a 33% increase from the previous year.

Regulatory and Compliance Impact

The Federal Trade Commission (FTC) may investigate potential violations of consumer protection laws. The Securities and Exchange Commission (SEC) requires transparency about material cybersecurity incidents, while state laws in California, New York, and Illinois mandate breach notification and data protection. The California Consumer Privacy Act (CCPA), for example, can impose civil penalties of up to $7,500 for intentional violations. If any European customers were affected, AT&T could face enforcement under the GDPR, which allows penalties up to €20 million or 4% of global turnover. The NIS2 Directive may also apply due to AT&T’s telecom infrastructure role, with fines reaching €10 million or 2% of turnover.

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