Patelco faces class-action lawsuits following ransomware attack

Patelco Credit Union is facing two class-action lawsuits after a ransomware attack caused a significant outage impacting its services and members. The lawsuits, filed by Oakland-based Cole & Van Note and San Diego firm Wolf Haldenstein Adler Freeman & Herz, allege that Patelco was negligent in safeguarding against the attack, which exposed members’ private information.

The complaints accuse Patelco of failing to implement necessary cybersecurity measures, not notifying customers promptly, and lacking transparency in communications about the breach. According to the lawsuits, the members are still unaware of the specific data stolen, the malware used, and the steps taken to secure their information.

Starting June 29, Patelco’s 450,000 members could not conduct electronic transactions, receive direct deposits, or pay bills online. Customers had to visit credit union branches or approved ATMs, often facing long lines and daily withdrawal limits, which have caused considerable inconvenience and financial stress.

In response, Patelco CEO Erin Mendez stated that the system had "stabilized" and showed "positive momentum" toward full restoration. Some services, such as direct deposits and transactions via PayPal and Venmo, have resumed.

The lawsuit from Cole & Van Note, filed on behalf of Eileen Poluck, aims to compel Patelco to enhance its cybersecurity practices and seeks monetary damages for affected customers. The firm’s principal attorney, Scott Cole, emphasized the significant negligence he believes Patelco demonstrated, leading to widespread harm among California residents. The second suit, from Wolf Haldenstein Adler Freeman & Herz, filed on behalf of Josh Warren, echoes these allegations and highlights a similar data breach the credit union experienced in 2023.

Patelco has not yet responded to the lawsuits. However, Rina Johnson, the vice president of marketing, stated the company’s focus remains on restoring services and supporting members. CEO Erin Mendez reassured customers that the credit union’s infrastructure is secure, and they expect to process pending transactions by the end of the week. However, a timeline for full account access remains undetermined.