In February 2025, plaintiff Andrew Willoughby filed a class action in Virginia federal court alleging that Capital One’s failure to secure its systems exposed thousands of customers’ personal identifiable information (PII), including names, Social Security numbers, addresses, credit card numbers, and transaction histories. The suit claims the breach—occurring between August 11, 2022, and May 22, 2023—was enabled by an employee’s “failure to maintain an adequate security system” and that Capital One delayed notifying customers, leaving them vulnerable to identity theft “for the rest of their lives.” The lawsuit seeks compensatory damages, injunctive relief, and reimbursement of out‑of‑pocket costs
Source: topclassactions
Small business owners often think data breaches happen only to big corporations—until they face the fallout themselves. Failing to protect customer data doesn’t just damage your reputation; it exposes you to costly lawsuits, regulatory penalties, and potentially crippling legal fees. Below are some high‑profile cases that illustrate how severe the consequences can be when businesses neglect cybersecurity.
1. Equifax’s $425 Million Settlement
In 2017, Equifax announced a breach exposing the PII of 147 million people. Regulators and states reached a global settlement requiring Equifax to pay up to $425 million to victims, provide free credit monitoring, and implement enhanced security measures. The case underscores that even market‑leading firms can face massive financial penalties and mandatory oversight when they fall short of data‑protection standards
Source: ftc
2. Target’s $18.5 Million Multistate Settlement
Following a 2013 breach that compromised over 100 million customer records, Target agreed to an $18.5 million settlement with 47 states. The breach cost the company not only this payout but also billions in remediation and a long‑term hit to consumer trust. For small businesses, this case illustrates that state attorneys general can band together to pursue damages when customer data is exposed
Source: attorneygeneral
3. Marriott’s $52 Million Penalty and Reforms
Marriott International faced multiple breaches affecting over 300 million guests between 2014 and 2020. In October 2024, Marriott agreed to pay $52 million to settle federal and multistate investigations and committed to overhauling its information‑security program, including stronger password controls and multifactor authentication. The case highlights how regulators can impose both financial and operational mandates on companies that mishandle customer data
Source: apnews
4. Paychex Sued for Negligence
In mid‑2024, Paychex was hit with a class action after a breach exposed employee PII. Plaintiffs alleged the payroll services provider failed to safeguard sensitive data and waited three months to notify affected workers—violations that can trigger negligence claims and class‑action exposure even for B2B service providers
Source: hrdive
Why This Matters to Your Business
These cases demonstrate that inadequate cybersecurity can lead to:
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Class‑action lawsuits demanding damages and injunctive relief.
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Regulatory fines from federal and state agencies.
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Mandatory security audits and operational reforms.
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Long‑term reputational damage that drives customers away.
Recommendation
To avoid becoming the next headline, small business owners should partner with professional cybersecurity experts who:
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Continuously monitor emerging threats.
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Conduct regular risk assessments and penetration tests.
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Implement best‑practice controls (encryption, MFA, network segmentation).
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Maintain incident‑response plans and ensure timely breach notification.
Investing in expert cybersecurity services isn’t just an expense—it’s a way to reduce the risk of legal and financial ruin. Make data protection a top priority, and give your customers—and yourself—the peace of mind you both deserve.