Flagstar Bank Settles 2021 Data Breach Lawsuit for $31.5 Million
Affected customers can claim up to $25,000 in documented losses by August 11, 2026.
Flagstar Bank, N.A. has agreed to a $31.5 million settlement to resolve a class action lawsuit stemming from two separate data breaches in 2021. The agreement provides a path for affected customers to recover financial losses resulting from the exposure of their personal information.
The settlement, part of the case Angus, et al. v. Flagstar Bank, N.A. (Case No. 2:21-cv-10657-MFL-DRG) in the U.S. District Court for the Eastern District of Michigan, establishes a total fund of $31.5 million. According to court and settlement documents, eligible class members may apply for a flat cash payment or seek reimbursement for documented out-of-pocket losses. Specifically, those who can prove monetary damages related to the breaches can claim up to $25,000.
The Security Failures
The legal action follows two distinct security incidents that occurred in January and December 2021. During these events, unauthorized third parties gained access to Flagstar Bank's internal systems, compromising the sensitive personal data of its customers. The resulting lawsuit alleged that the bank failed to maintain and implement adequate security measures necessary to protect consumer information from such intrusions.
Industry Implications
This settlement underscores the escalating legal and financial risks financial institutions face as data security becomes a primary liability. For the banking industry, the case serves as a reminder that inadequate safeguards can lead to multimillion-dollar payouts and prolonged litigation. For consumers, the settlement provides a critical mechanism to recoup funds lost to identity theft or fraud, while highlighting the necessity of continuous credit monitoring following a corporate security failure.
How to File a Claim
Customers who believe their information was compromised during the 2021 incidents must act before the established cutoff. The deadline to file a claim for a portion of the settlement fund is August 11, 2026. Claimants will need to provide documentation for any monetary loss requests exceeding the flat-payment threshold to qualify for the higher reimbursement tiers. This window allows significant time for affected parties to gather the necessary financial records to substantiate their claims for the maximum available reimbursement.