In today’s digital-first world, where financial institutions hold vast amounts of sensitive customer information, data breaches have become a rising concern—especially for mortgage and loan servicers that handle personal, financial, and credit data. At Sparrow, we’ve covered some of the most impactful settlements related to cybersecurity failures, including the Imagine360 data breach case and Drizly tip violations. Today, we’re spotlighting another significant case involving LoanCare LLC, one of the nation’s leading loan servicing companies.
LoanCare has agreed to a $5.9 million class action settlement to resolve allegations that it failed to prevent a data breach in November 2023 that exposed the private information of more than 1.3 million individuals. If you received a notice from LoanCare informing you of the breach, you may be eligible to claim compensation for your time, losses, and preventive credit monitoring. This article breaks down what happened, who qualifies, what benefits are offered, and how Sparrow can make filing your claim seamless and stress-free.
Background of the LoanCare Data Breach Class Action
On November 2, 2023, LoanCare discovered that its data systems had been breached by unauthorized third parties. The breach reportedly exposed a significant volume of personal customer data—including full names, Social Security numbers, home addresses, loan information, and potentially sensitive financial account details.
LoanCare is a major player in the mortgage servicing space, managing loans for banks, credit unions, and financial institutions. Because of the nature of its business, the company is entrusted with extremely sensitive customer data. When the breach occurred, affected individuals were put at immediate risk of identity theft, financial fraud, and long-term credit damage.
A class action lawsuit was subsequently filed, alleging that LoanCare failed to implement adequate cybersecurity safeguards to prevent the breach. Plaintiffs argued that LoanCare did not follow industry-standard protocols, such as multi-layered authentication systems, encrypted data storage, and network monitoring. The suit claimed that these failures left customer data vulnerable and that LoanCare did not act swiftly enough to notify affected individuals or mitigate the damage.
While LoanCare denies any wrongdoing or liability, the company agreed to a $5.9 million settlement to resolve the claims. In doing so, LoanCare joins a growing list of financial institutions opting for settlement rather than extended litigation, highlighting a critical shift toward greater accountability in data stewardship.
The settlement aims to provide direct financial reimbursement to victims of the breach while also offering services such as credit monitoring to reduce the risk of future harm. The case serves as a stark reminder of the importance of cybersecurity—especially when dealing with financial data—and underscores the role legal settlements can play in ensuring justice and consumer protection.
Who’s Eligible for the Settlement?
You may be eligible to participate in this settlement if:
- You received a notice from LoanCare informing you that your personal data was impacted by the data breach that occurred in November 2023.
- You are a current or former customer of LoanCare whose personal information was exposed during the breach.
If you’re unsure whether you qualify, you can contact the claims administrator or visit the settlement website for eligibility verification.
Settlement Benefits
LoanCare will pay $5.9 million into a settlement fund that will be used to cover the following benefits for affected individuals:
1. Documented Losses Reimbursement
You may claim up to $5,000 in reimbursement for documented losses caused by the data breach. These include:
- Unauthorized bank charges
- Credit card late fees or penalties
- Legal or notary expenses
- Postage and document handling fees
- Credit monitoring and identity theft recovery costs
2. Lost Time Compensation
If you spent time addressing the effects of the data breach—such as placing fraud alerts, speaking with banks, or dealing with unauthorized transactions—you may receive up to $100 for 4 hours of time, calculated at $25/hour.
3. Default Flat-Rate Payment
If you do not have documented losses, you may still qualify for a flat-rate payment. This amount will depend on the number of claimants and the remaining funds after reimbursement claims have been paid.
4. Free Credit Monitoring
All eligible claimants will receive two years of credit monitoring and identity theft protection, which includes:
- Dark web monitoring
- Credit alerts
- Identity restoration services
- Up to $1 million in identity theft insurance
This benefit applies whether or not you suffered financial losses due to the breach.
How to File a Claim
Filing your claim is straightforward, and Sparrow is here to help ensure every step is completed correctly. Here’s what you need to do:
- Visit the official settlement website: LoanCareDataSettlement.com
- Fill out the claim form by the deadline of September 3, 2025.
- Attach supporting documentation (if claiming expenses).
- Submit online or mail your completed form to:
- LoanCare Data Breach Settlement Administrator
- P.O. Box 225391, New York, NY 10150-5391
Need help preparing your claim? Use Sparrow’s claim assistance tool to ensure your submission is accurate and timely.
Important Deadlines
| Action | Deadline |
|---|---|
| Submit claim form | September 3, 2025 |
| Opt out or object | August 2, 2025 |
| Final approval hearing | September 30, 2025 |
Case Snapshot
- Settlement Fund: $5.9 million
- Case Name: Zemaitis, et al. v. LoanCare LLC, Case No. 3:24-cv-00125 (E.D. Virginia)
- Settlement Website: LoanCareDataSettlement.com
- Phone Number: 1-855-944-3594
Conclusion
The LoanCare data breach settlement represents a critical moment of accountability in the financial services industry. With millions of individuals affected, this $5.9 million fund offers a clear pathway to restitution for those impacted. Whether you’ve suffered monetary losses or are seeking peace of mind through credit monitoring, this settlement provides tangible protections and financial relief.
In today’s digital world, personal data breaches are no longer isolated incidents—they are systemic risks. But that doesn’t mean you’re powerless. Sparrow is committed to ensuring that consumers like you are informed, empowered, and equipped to take action. Don’t let this opportunity pass you by. Start your claim with Sparrow today, and stay tuned to our Class Action News hub for the latest updates on legal cases that impact your digital and financial well-being.