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Pressure on Patelco grows, as does the number of class action lawsuits

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As pressure mounts on Patelco Credit Union, the $9.7 billion bank that is struggling to restore its banking systems that were shut down by a ransomware attack on June 29, the number of class action lawsuits filed in federal and state courts is growing.

In addition, four members of Patelco — Shawn Kent, Kaaron Warren, Wily Lee and Carl Cordell — filed separate class action lawsuits this week and last week in Alameda County Superior Court in California.

All of the class action lawsuits alleged that the ransomware attack allegedly exposed and compromised Patelco members’ personal information — names, dates of birth, addresses, Social Security numbers, driver’s license numbers — and their account information, which could significantly increase members’ risk of fraud and identity theft. The lawsuits also alleged that Patelco failed to follow proper data encryption protocols, policies and procedures, which compromised members’ private information.

On June 29, Patelco informed its members in an email notification that there had been a “major security incident,” later confirming that it was a ransomware attack that had disabled the bank’s systems. On July 2, Patelco said in a question-and-answer session that at the time, there was no evidence that the ransomware attack had affected mobile and online banking user IDs, passwords and account information. The credit union also repeatedly said that members’ money was safe and secure, reminding them that all of their accounts were insured by the NCUA. The credit union serves more than 500,000 members.

In her Tuesday statement, Patelco President and CEO Erin Mendez assured members that the credit union’s infrastructure is stable, secure and is growing rapidly each day toward its ultimate goal of returning to business.

“We are also working around the clock to clear the backlog, which includes transaction processing (e.g., ACH and check transactions being recorded in your account) and those being recorded in person at a Patelco branch,” she wrote on the PCU’s Security and Information Incident Update Center. “We expect to be 50% through with this task by tomorrow (Wednesday) and expect to be fully cleared by the end of the week. Once that happens, we will be able to confirm a date when you will be able to access your accounts.”