Cyberattack Announced in January 2024 Triggers Class Action Against Arrowhead Regional Computing Consortium

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A proposed class action claims Arrowhead Regional Computing Consortium (ARCC) failed to protect the private data of more than 65,000 individuals during a cyberattack reportedly detected in February 2023.

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The 34-page lawsuit says the company, which provides payroll services and student data systems to more than 50 school districts in Minnesota, discovered unauthorized access to its network on February 6 of last year. Per the suit, an investigation determined that the data breach compromised certain personal information belonging to ARCC employees and the students, families and teachers affiliated with its school district clients.

According to the case, the cyberattack may have exposed individuals’ names, Social Security numbers, health insurance data and medical information.

The complaint contends that although ARCC fully understood its obligation to safeguard the data in its care and the substantial consequences that would result from its failure to do so, the company failed to implement “basic” cybersecurity protocols. The highly sensitive information was stored “unsecured and unencrypted” in ARCC’s network, “in a condition vulnerable to cyberattacks,” the filing alleges.

The plaintiff, a Minnesota resident, says he received notice of the data breach from ARCC in January 2024, almost a year after the company purports to have discovered the incident. The notice letter informed the man that his private information had been compromised in the breach, the lawsuit states.

Victims like the plaintiff now face a heightened risk of identity theft and fraud as a result of ARCC’s negligence, the suit claims, adding that impacted individuals will also likely incur significant out-of-pocket costs for protective measures and financial services.

The lawsuit looks to represent anyone ARCC identified as being among the individuals affected by the data breach, including those who received notice of the incident.

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