Can You Sue a Company for Leaking Your Personal Information?—Answered
According to the Identity Theft Resource Center’s 2023 Annual Data Breach Report, there were 3,205 personal data compromises in 2023, a 78% increase from 1,801 cases in 2022[1]. This alarming trend has raised concerns about the security and protection of personal information, leaving many individuals wondering if they can take legal action against companies that leak their sensitive data.
So, can you sue a company for leaking your personal information? In this guide, we’ll explore whether seeking legal action is possible, the types of lawsuits you might be able to file, and the compensations that might come out of them. You'll also learn about methods for securing your sensitive data online, including using virtual cards, which can enhance online payment security.
Disclaimer: The information in this article is not intended to be legal advice. It is provided for general informational purposes only and should not be considered a substitute for actual legal counsel.
What Are the Risks of Leaked Personal Information?
Your personal data can get leaked from a company's database in multiple ways—hacking, insider threats, system vulnerabilities, human error, or unintentional exposure. Once in the hands of cybercriminals, this information can be used for nefarious activities, including:
- Identity theft—Hackers can impersonate you to obtain loans, commit tax fraud, or claim your medical or other benefits.
- Financial loss—With access to your credit card or bank account details, criminals can make fraudulent online transactions and drain your funds.
- Spam and unsolicited marketing—Fraudsters can use your leaked email address or phone number to send you spam emails, robocalls, and other telemarketing scams.
- Reputational damage—If your medical records, private conversations, photos, or videos get exposed, it could damage your personal and professional reputation.
Can You Sue a Company if Your Personal Information Is Stolen?
The legal basis for suing a company for compromising your sensitive information varies depending on the jurisdiction and applicable laws. In most cases, you might be able to file a lawsuit under one or more of the following legal grounds:
- Negligence—If a company fails to take reasonable measures to secure your data, such as using encryption or regularly updating security protocols
- Breach of contract—If a company violates its own privacy policies or fails to fulfill its contractual obligations to protect user data
- Violation of consumer protection and privacy laws—When a company infringes on your rights under laws such as the California Consumer Privacy Act (CCPA)[2] or the Gramm-Leach-Bliley Act (GLBA)[3]
Besides proving there are grounds for legal action, you should also be able to demonstrate that you’ve suffered harm or damages due to the data breach. In some cases, damages may also include future harm. Examples of damages include:
- Financial losses, including fraudulent charges on your credit card or bank account
- Emotional distress, such as anxiety or stress
- Damage to your reputation and loss of privacy
- Expenses incurred to protect yourself from identity theft or fraud, such as credit monitoring services, legal fees, and identity theft insurance
What Are the Possible Legal Actions and Compensations?
If you decide to sue a company for your stolen personal information, you can pursue either of the following legal actions:
The compensation you might receive depends on the severity of the data breach, the damages you suffered, and the strength of your legal case.
Companies may sometimes offer settlements to affected users before the case goes to trial. These settlements may include monetary compensation, free credit monitoring services, or other forms of restitution.
For instance, following the 2017 Equifax data breach that exposed the personal information of 147 million people, the company agreed to pay a settlement of up to $425 million as compensation to affected users[4].
How To Secure Your Personal Information Against Online Threats
While you can hold companies accountable for compromising your personal information, it's important to take steps to limit the risks of becoming a victim of data theft. Here are some measures to protect your data online:
- Use unique passwords for each account so that a single breach doesn't compromise multiple accounts. A password manager like Norton, Keeper, or Bitwarden can help you generate complex passwords for each site, store them securely, and automatically fill them in when needed.
- Enable two-factor authentication for your online accounts. This adds an extra layer of security by requiring a one-time code or biometric verification in addition to your password when logging in.
- Be cautious about giving out your personal information to companies and websites. Only provide the minimum necessary information and always check for privacy policies and security measures. You can also enable "do not track" settings on your browsers and apps to limit the amount of data companies can collect from you.
An effective way to protect your financial information is to use virtual cards when making online payments. Virtual cards mask your actual card details with randomly generated card numbers, limiting the amount of information potential hackers can steal in a data breach.
Banks such as Capital One and Citi offer virtual cards. Still, if you opt for a dedicated card provider like Privacy, you can also get robust security and advanced card control features.
Exercise Data Security With Privacy Virtual Cards
As a BBB-accredited company, Privacy helps over 250,000 Americans protect their financial information against potential merchant data breaches.
After connecting your debit card or bank account to Privacy, you can generate multiple virtual cards for your online payments. Each Privacy Card comes with a unique 16-digit card number, expiration date, and CVV that you can use to shop online—just like a regular payment card. If a potential hacker manages to breach the merchant’s database, they’ll only get the virtual card data, while your actual financial info remains secure on Privacy’s servers.
Privacy is PCI-DSS compliant and employs rigorous security measures to keep your data safe, including AES-256 encryption and two-factor authentication to boost your account security against unauthorized access.
Other measures include:
- Security audits—Privacy undergoes regular third-party audits to ensure its security measures meet industry standards.
- Firewalled servers—Data is kept on servers with firewalls that protect against potential cyberattacks and unauthorized access.
- Fraud investigation—You can dispute a potentially suspicious transaction, and Privacy will investigate and initiate a chargeback if there are grounds for it.
Privacy Cards—Types and Features
With Privacy, you can create three types of cards:
- Single-Use Cards—Designed for one-time use, these cards close moments after the initial transaction, rendering them useless to potential hackers. You can use them for one-off purchases on unfamiliar websites.
- Merchant-Locked Cards—Merchant-Locked Cards “lock” to the first vendor they’re used with and decline payments with other merchants. They’re a perfect fit for transactions with your favorite online stores and paying utility bills and subscriptions such as Roku, Hulu, and AMC Plus.
- Category-Locked Cards—Unlike Merchant-Locked Cards that apply to a single vendor, these cards “lock” to a specific merchant category. They help budget and control spending in predefined categories such as health and wellness or travel.
You can set spending limits and pause or close Privacy Cards for greater financial control. After setting a spending limit, Privacy will decline transactions that exceed your approved limit, helping protect you against hidden fees and price hikes sneaky merchants might impose on you. Pausing or closing your card blocks further charges, such as those that might occur when stopping a subscription.
Additional Convenience Features
Besides protecting your financial information, Privacy offers several convenience features to streamline online payments. For instance, the Privacy Browser Extension, which is available for all major browsers—Chrome, Edge, Firefox, Safari, and Safari for iOS—autofills virtual card numbers at checkout. This eliminates the need to memorize and manually fill card numbers every time you shop online.
With the Privacy App, which is available for Android and iOS, you can monitor card activity from your smartphone or tablet, helping you spot and promptly respond to any suspicious activity. Other features include:
- 1Password integration—The integration allows you to create, store, and manage your virtual cards and passwords from the 1Password browser extension.
- Shared Cards—This feature lets you securely share virtual cards with trusted individuals—family members or friends—to simplify joint expenses while maintaining control over your funds.
- Card Notes—To organize and track spending, you can attach notes such as merchant information and the next charge date to your virtual cards.
How To Get a Privacy Virtual Card
To get a Privacy Card, complete four steps:
- Visit the Privacy signup page
- Fill out the necessary information
- Add a funding source
- Request and generate your Privacy Virtual Card
You can choose from four monthly plans that Privacy offers:
References
[1]ITRC. https://www.idtheftcenter.org/post/2023-annual-data-breach-report-reveals-record-number-of-compromises-72-percent-increase-over-previous-high/, sourced December 12, 2024
[2]OAG. https://oag.ca.gov/privacy/ccpa, sourced October 1, 2024
[3]FTC. https://www.ftc.gov/business-guidance/privacy-security/gramm-leach-bliley-act, sourced October 1, 2024
[4]FTC. https://www.ftc.gov/enforcement/refunds/equifax-data-breach-settlement, sourced December 17, 2024
