Nelnet Servicing, LLC Data Breach Leaks Social Security Numbers of 2.5 Million Student Loan Borrowers | Console and Associates, PC

On August 26, 2022, Edfinancial Services, LLC, reported a data breach resulting from an incident that the company claims originated from Nelnet Servicing, LLC, a third-party vendor used by Edfinancial for its service system and site portal. Web client. According to Nelnet, the breach resulted in the compromise of some borrowers’ names, addresses, email addresses and social security numbers. Recently, based on information received from Nelnet, Edfinancial Services sent data breach letters to all affected parties, informing them of the incident and what they can do to protect against identity theft. and other frauds.

If you have received a data breach notification, it is essential that you understand what is at risk and what you can do about it. To learn more about how to protect yourself against fraud or identity theft and what your legal options are following the Nelnet Servicing data breach, please see our recent article on the subject. here.

What we know about the Nelnet Servicing data breach

According to an official notice filed by the company, on July 21, 2022, Edfinancial Services, LLC was notified by Nelnet that the company had suffered a data security incident. Nelnet explained that after discovering the unauthorized access, management secured its systems, blocked the suspicious activity, fixed the issue and launched an investigation with third-party forensic experts to determine the nature and scope of the breach. ‘activity. However, on August 17, 2022, the investigation revealed that an unauthorized party was able to access student loan registration information between June 2022 and July 22, 2022.

After discovering that sensitive consumer data was accessible to an unauthorized party, Nelnet Servicing then reviewed the affected files to determine what information was compromised and which consumers were affected. Although the information hacked varies depending on the individual, it can include your name, address, email address, and social security number. This information was conveyed in the letter from Edfinancial Services but appears to have been confirmed by Nelnet Servicing, LLC.

On August 26, 2022, Edfinancial Services, LLC sent data breach letters to everyone whose information was compromised as a result of the recent data security incident.

More information about Nelnet Servicing, LLC

Nelnet Servicing, LLC is a technology and education solutions company based in Lincoln, Nebraska. One of the main ways of generating revenue for the business is through managing student loans. In this way, the company handles all aspects of loan governance, such as civil service loan forgiveness, loan consolidation and scheduling services for borrowers who are unable to make their payments. monthly. Nelnet operates several subsidiaries, including Nelnet Business Services, Nelnet Communications Services, Nelnet Diversified Services and Nelnet Financial Services. Nelnet Servicing employs more than 7,988 people and generates approximately $1 billion in annual revenue.

Edfinancial Services, LLC is a student loan servicer based in Knoxville, Tennessee. The company is an official service of Federal Student Aid. The company provides customer services to borrowers, including answering questions and managing changes to repayment plans and processing payments. Edfinancial Services employs more than 375 people and generates approximately $193 million in annual revenue.

Third Party Data Breach Liability

Following a data breach, it can be difficult to determine which company, if any, is legally responsible for the incident. While taking legal action may not be at the forefront of your mind after your information leaks, it is important to understand liability in the event of a data breach, as damages resulting from these incidents can be serious and companies can be held financially responsible. Of course, data breaches involving multiple organizations, such as the Edfinancial Services, LLC / Nelnet Servicing, LLC data breach, raise additional challenges.

Generally, any company that retains, stores, transmits, or receives consumer data has a legal obligation to the consumer, regardless of which company the consumer provided their information to. With respect to the Edfinancial Services, LLC / Nelnet Servicing, LLC data breach, based on the information provided in the data breach letter, it would appear that Nelnet Servicing, LLC is the party most likely responsible. Indeed, based on the letter, it does not appear that Edfinancial Services’ computer system was hacked. However, it is too early to tell if Nelnet Servicing was actually responsible for the breach. Before this decision can be made, a thorough investigation of the facts leading to the violation must be carried out.

In a data breach lawsuit or data breach class action lawsuit, a company can be held financially liable for victims’ harms if they can prove the following:

  • The organization owed the victim a duty of care;

  • The organization failed in its duty to the victim;

  • The organization’s negligence caused or contributed to the victim’s harm (ie identity theft); and

  • The victim suffered economic or non-economic harm as a result.

Although it sounds simple, proving these elements can be difficult, especially in a case like this where the hacked data was shared from one company to another. An experienced data breach attorney can help victims of the Edfinancial Services / Nelnet Servicing data breach evaluate their options and determine whether they can pursue legal action against either company.

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