How T-Mobile’s $350 Million Data Breach Settlement Still Leaves The Black Community At Risk

CBX Vibe:Protection” Logiq

By CultureBanx Team

  • T-Mobile has agreed to pay $350M to settle multiple class-action suits stemming from a data breach disclosed last year affecting around 53 million customers
  • Black people are 53% more likely to claim a data breach led to a loss or decrease in business

The second largest U.S. wireless carrier, T-Mobile (TMUS +0.96%), has agreed to pay $350 million to settle multiple class-action suits. This all stems from a data breach disclosed last year affecting around 53 million customers personal data. When it comes to data breaches they are often more problematic for people of color living on fixed or low incomes, therefore mitigating widespread damage from this data breach to these communities is imperative for T-Mobile to restore consumer confidence.

Why This Matters: Currently it has 38% of the U.S. prepaid market, and if you look at the breakdown by race, 14% of T-Mobile users are Black, according to Nielsen. As part of the settlement T-Mobile agreed to spend an extra $150 million on cybersecurity through the end of 2023. It’s important for the company to also understand how its data breach continues to impact vulnerable communities to allocate money towards fixing issues stemming from this incident. 

Situations like these have a negative impact on Black people who are 53% more likely to claim a data breach led to a loss or decrease in business, according to a report from the Rand Corporation. People of color often fall victim to incorrect or stolen information that in turn can have long-term crippling effects. 

This is the fifth such incident the wireless carrier has suffered in the past three years, so clearly these situations are a persistent problem. “Customers are first in everything we do and protecting their information is a top priority. Like every company, we are not immune to these criminal attacks,” T-Mobile wrote in a statement on its website. 

T-Mobile disclosed in August 2021 that the names, Social Security numbers and information from driver’s licenses or other identification of just over 40 million people who applied for T-Mobile credit were exposed in the data breach. Additionally,  data for around 7.8 million monthly for phone service users also appeared to be compromised.

When it comes to receiving notifications of a breach, 49% of white people reported receiving significantly more notifications than all other ethnic groups. In particular, they reported receiving twice as many notifications as Black people at 24%, according to the Rand Corporation report. This is extremely important data for T-Mobile to take into account during its customer outreach.

The wireless carrier reported a loss of $108 million in its 2022 second quarter, with revenue of $19.7 billion in the period. T-Mobile currently has more than 109 million subscribers, of which 88 million are postpaid customers.

What’s Next: If the settlement is approved, T-Mobile’s $350 million will go into a fund covering payments to class members, as well as legal and administrative fees. According to its SEC filing, T-Mobile expects the settlement to be approved in December 2022.

CBX Vibe: “Protection” Logiq

CONTRIBUTOR

CultureBanx Team

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