New York man files class-action lawsuit against Yahoo

Sep 24, 2016 09:35 GMT  ·  By

It took one day for ambulance chasers to file lawsuits against Yahoo over its recently announced data breach that exposed the personal details of over 500 million of its users.

The lawsuit, reported first by Fortune, comes on the heels of a Yahoo public statement in which the company acknowledged "someone" breached its servers in 2014 and stole user information.

Yahoo blamed the hack on a "state-sponsored actor" and stated they were still investigating the incident.

New Yorker files class-action lawsuit against Yahoo

A New Yorker named Ronald Schwartz filed the lawsuit on behalf of all Yahoo users and is asking for class-action status. Schwartz is accusing the company of gross negligence.

Schwartz's lawyers filed the lawsuit in San Jose, California, one of the US states with the most strict set of data breach rules, and Yahoo's native state.

Verizon announced in July that it would be buying some of Yahoo's main assets for $4.8 billion. The transaction will take some time to finalize and Verizon may have the legal loopholes to get out of the acquisition if the lawsuit becomes too costly.

The acquisition took place before Yahoo received tips of a data breach in August when a hacker called Peace had put up 200 million user records on sale on a Dark Web marketplace.

Yahoo sued over negligence, tardiness in warning users

According to Yahoo, that tip made the company investigate the breach, which turned out to be false but revealed the bigger breach later on.

Schwartz claims that Yahoo should have not waited almost two months to tell users about the breach. Yahoo may be cleared if the FBI was also called in to investigate and agency officials instructed the company to hold off notifying customers, as is their custom when investigating sensitive breaches. If not, the company is in hot water.

Ironically, on the same day Yahoo announced its 500-million mega breach, a UK judge sentenced a hacker to two years in prison for hacking Yahoo! Voice in 2012 and stealing and dumping personal details of over 450,000 users, the biggest data breach until then in Yahoo's history.