Yahoo agrees to pay $50 million, provide credit monitoring to settle data breach lawsuit

The two-year-old suit looks to be winding down

Bottom line: Avoiding a trial was likely in the best interest of all
parties, especially Yahoo, as the company could have faced a much larger
penalty had it fallen on the wrong side of a verdict. Lawyers
representing Yahoo accountholders could receive as much as $37.5 million
in fees and expenses if the settlement is approved.

Yahoo has agreed to settle a two-year-old lawsuit stemming from massive
data breaches that occurred in 2013 and 2014 but weren’t disclosed until
years later.

A settlement fund of $50 million will be set up to cover damages.
Complementary credit monitoring will also be provided to the estimated
200 million people affected by the breach according to a report from the
Associated Press.

Yahoo accountholders will be eligible for compensation at a rate of $25
per hour for time spent dealing with issues related to the breach. For
those that can document their losses, Yahoo will cover up to 15 hours of
lost time, or $375. Those unable to provide documentation may seek up
to five hours of compensation, or $125.

Those who paid for a premium e-mail account will also be eligible for a 25 percent refund, we’re told.

Affected parties will also receive two years of free credit monitoring service from AllClear.

According to the AP, Verizon – who now owns Yahoo – will pay for half of
the settlement cost while Altaba, the company that manages what’s left
of Yahoo’s assets, will fund the other half. Altaba has already been hit
with a $35 million fine from the Securities and Exchange Commission for
Yahoo’s failure to disclose the breaches to investors.

A hearing to approve the settlement is scheduled for November 29 in San Jose, California.

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