Flagstar Bank Settles 2021 Data Breach Lawsuit for $31.5 Million

Flagstar Bank agreed to a $31.5 million settlement to resolve a class-action lawsuit stemming from two data breaches that occurred in 2021. The first incident in January 2021 affected more than 1.4 million customers, followed by a second breach in December 2021. Plaintiffs alleged the bank failed to protect personal information and delayed notifying affected individuals.

Although the bank denied any wrongdoing, it reached the settlement to avoid prolonged litigation. Approximately 2.19 million people are eligible to participate. Claimants with documented losses may receive up to $25,000, while those without proof are eligible for a pro rata payment of about $60. Residents of California may receive $100 under the California Consumer Privacy Act.

Eligible customers must submit claims by August 11, 2026. A final fairness hearing for the settlement is scheduled for October 11, 2026.