Recently, Medaglia & Murphy, Inc. confirmed that the company was the target of a ransomware attack, resulting in the sensitive information of as many as 6,701 customers being compromised.
If you received a data breach notification, it is essential you understand what is at risk. More about our investigation into this breach, and what you can do if your data was stolen, is available here.
Last year, 1,862 data breaches affected more than 189 million people. On average, victims of identity theft spend 200 hours and over $1,300 recovering their identity. Many victims also suffer emotional distress, credit damage, and may even end up with a criminal record. Taking immediate action is the best way to prevent the worst consequences of a data breach.
What We Know So Far About the Medaglia & Murphy Data Breach
According to a letter from the company’s attorneys, on December 29, 2021, Medaglia & Murphy learned that an unauthorized party gained access to its computer network. In response, the company opened an investigation into the incident to learn more about its nature and scope, as well as whether any sensitive client information was leaked as a result. The investigation revealed that the company had been targeted in a ransomware attack. The company paid the ransom demanded in hopes of securing the compromised data. While Medaglia & Murphy does not have any knowledge that any client information was posted on the dark web, it cannot be sure that was not the case.
Upon learning of the extent of the security breach, Medaglia & Murphy then reviewed the affected files to determine what information was compromised. While the compromised information varies based on the individual, it may include your Social Security number; financial account numbers; draft and completed tax returns; W-2, 1099, 1098, 1095, and other income and tax forms; contact information; date of birth; documents provided by you to support your tax returns; and any other information Medaglia & Murphy may have received from you.
On March 16, 2022, Medaglia & Murphy began sending out data breach notification letters to all individuals whose information was compromised as a result of the recent data security incident. In this letter, the firm notes that the breach also impacted clients of Paradis Raymond & Jalbert and Roy & Rurak, which is an affiliated organization.
Medaglia & Murphy, Inc. is an accounting firm based in Nashua, New Hampshire. The company provides a wide range of accounting services on behalf of individuals and businesses, including general accounting, auditing, and tax preparation. Medaglia & Murphy also assists its business clients in determining the proper structure for their organization, and other consulting services. Medaglia & Murphy employs approximately 33 people and generates roughly $6 million in annual revenue.
More About the Causes and Risks of Data Breaches
Often, data breaches are the result of a hacker gaining unauthorized access to a company’s computer systems with the intention of obtaining sensitive consumer information. While no one can know the reason why a hacker targeted Medaglia & Murphy, it is common for hackers and other criminals to identify those companies believed to have weak data security systems or vulnerabilities in their networks.
Once a cybercriminal gains access to a computer network, they can then access and remove any data stored on the compromised servers. While in most cases a company experiencing a data breach can identify which files were accessible, there may be no way for the company to tell which files the hacker actually accessed or whether they removed any data.
While the fact that your information was compromised in a data breach does not necessarily mean it will be used for criminal purposes, being the victim of a data breach puts your sensitive data in the hands of an unauthorized person. As a result, you are at an increased risk of identity theft and other frauds, and criminal use of your information is a possibility that should not be ignored.
Given this reality, individuals who receive a Medaglia & Murphy data breach notification should take the situation seriously and remain vigilant in checking for any signs of unauthorized activity. Businesses like Medaglia & Murphy are responsible for protecting the consumer data in their possession. If evidence emerges that Medaglia & Murphy failed to adequately protect your sensitive information, you may be eligible for financial compensation through a data breach lawsuit.
What Are Consumers’ Remedies in the Wake of the Medaglia & Murphy Data Breach?
When customers decided to do business with Medaglia & Murphy, they assumed that the company would take their privacy concerns seriously. And it goes without saying that consumers would think twice before giving a company access to their information if they knew it wasn’t going to be secure. Thus, data breaches such as this one raise questions about the adequacy of a company’s data security system.
When a business, government entity, non-profit organization, school, or any other organization accepts and stores consumer data, it also accepts a legal obligation to ensure this information remains private. The United States data breach laws allow consumers to pursue civil data breach claims against organizations that fail to protect their information.
Of course, given the recency of the Medaglia & Murphy data breach, the investigation into the incident is still in its early stages. And, as of right now, there is not yet any evidence suggesting Medaglia & Murphy is legally responsible for the breach. However, that could change as additional information about the breach and its causes is revealed.
If you have questions about your ability to bring a data breach class action lawsuit against Medaglia & Murphy, reach out to a data breach attorney as soon as possible.
What Should You Do if You Receive a Medaglia & Murphy Data Breach Notification?
If Medaglia & Murphy sends you a data breach notification letter, you are among those whose information was compromised in the recent breach. While this isn’t a time to panic, the situation warrants your attention. Below are a few important steps you can take to protect yourself from identity theft and other fraudulent activity:
-
Identify What Information Was Compromised: The first thing to do after learning of a data breach is to carefully review the data breach letter sent. The letter will tell you what information of yours was accessible to the unauthorized party. Be sure to make a copy of the letter and keep it for your records. If you have trouble understanding the letter or what steps you can take to protect yourself, a data breach lawyer can help.
-
Limit Future Access to Your Accounts: Once you determine what information of yours was affected by the breach, the safest play is to assume that the hacker orchestrating the attack stole your data. While this may not be the case, it’s better to be safe than sorry. To prevent future access to your accounts, you should change all passwords and security questions for any online account. This includes online banking accounts, credit card accounts, online shopping accounts, and any other account containing your personal information. You should also consider changing your social media account passwords and setting up multi-factor authentication where it is available.
-
Protect Your Credit and Your Financial Accounts: After a data breach, companies often provide affected parties with free credit monitoring services. Signing up for the free credit monitoring offers some significant protections and doesn’t impact any of your rights to pursue a data breach lawsuit against the company if it turns out they were legally responsible for the breach. You should contact a credit bureau to request a copy of your credit report—even if you do not notice any signs of fraud or unauthorized activity. Adding a fraud alert to your account will provide you with additional protection.
-
Consider Implementing a Credit Freeze: A credit freeze prevents anyone from accessing your credit report. Credit freezes are free and stay in effect until you remove them. Once a credit freeze is in place, you can temporarily lift the freeze if you need to apply for any type of credit. While placing a credit freeze on your accounts may seem like overkill, given the risks involved, it’s justified. According to the Identity Theft Resource Center (“ITRC”), placing a credit freeze on your account is the “single most effective way to prevent a new credit/financial account from being opened.” However, just 3% of data breach victims place a freeze on their accounts.
-
Regularly Monitor Your Credit Report and Financial Accounts: Protecting yourself in the wake of a data breach requires an ongoing effort on your part. You should regularly check your credit report and all financial account statements, looking for any signs of unauthorized activity or fraud. You should also call your banks and credit card companies to report the fact that your information was compromised in a data breach.
Below is a copy of the initial data breach letter sent on behalf of Medaglia & Murphy, Inc.:
Dear [Consumer],
McLane Middleton, P.A. represents Medaglia & Murphy, Inc. (“Medaglia & Murphy”), which has its principal place of business at 23 East Pearl Street, Nashua, NH 03060. We are writing to inform you about a data security incident involving Medaglia & Murphy that affects 435 adults and 111 minors who are residents of Maine.
Please note that we are simultaneously providing you with notice on behalf of Paradis Raymond & Jalbert and Roy & Rurak, which are affiliates. They also were affected, because they retain certain of their client- taxpayer information on the network of Medaglia & Murphy impacted by the incident.
What Happened: On December 29, 2021, Medaglia & Murphy discovered that a third party had obtained unauthorized remote access to its network. Medaglia & Murphy immediately contacted its managed information technology service provider (MSP), disabled the Internet connection to the network, and deactivated servers and computers on the network. The MSP removed all potential malware from Medaglia & Murphy’s servers and computers, and rapidly rebuilt the network so the firms could continue to serve their clients during the tax preparation season.
At the same time the MSP was performing that work, Medaglia & Murphy retained a cyber security attorney and a forensic expert to investigate and address this matter. The forensic expert first attempted to determine what information the third party had accessed. However, the forensics revealed only which portions of the network the third party accessed, not the particular information accessed.
As a result, Medaglia & Murphy initiated the process to notify the cyber security division of the Internal Revenue Service (IRS). Medaglia & Murphy did so immediately, even before it was able to identify or notify the population of affected individuals, in order to implement safeguards to mitigate the potential electronic filing of fraudulent tax returns, since the IRS electronic tax return filing system opened in mid- January 2022. Medaglia & Murphy supplied the IRS with the information necessary to activate the IRS’s advanced fraud detection and prevention system, called Return Integrity Compliance Services (RICS). Because Medaglia & Murphy timely initiated RICS, the IRS’s accounts for all of its clients and their dependents, including all individuals affected by the incident, have already had advanced mechanisms implemented to detect and prevent the potential electronic filing of a fraudulent return for this tax year.
As Medaglia & Murphy was working with the IRS to initiate RICS, it received communications from the third party that accessed its network, confirming that they had done so and demanding a ransom in return for assurances about the information they accessed. While Medaglia & Murphy did not need to pay ransom to restore its network and would not have considered doing so under other circumstances, Medaglia & Murphy decided to engage with the third parties to assess their reliability and negotiate certain assurances from them. Medaglia & Murphy decided to do so because the firm wanted to provide its clients with as much assurance as possible concerning its efforts to protect their information.
To engage in these negotiations, Medaglia & Murphy communicated with and relied on federal law enforcement at the United States Secret Service (USSS), who have expertise with respect to these situations. Based on the information Medaglia & Murphy learned during the negotiations, the USSS and its cyber security attorney and forensic expert felt that the third party actors were credible, and that Medaglia & Murphy could reasonably rely on their assurance that they would destroy the information they had accessed in return for the ransom payment. Thus, Medaglia & Murphy paid the ransom.
Before Medaglia & Murphy received the ransom demand, its forensic expert had been monitoring the dark web to detect if any information that might have been accessed on the firm’s network was being offered for sale on the dark web. Medaglia & Murphy’s expert also has continued to do so after the ransom was paid. To date, Medaglia & Murphy has not discovered any such information on the dark web, and has no reason to believe that the third party actors released any information they accessed.
What Information Was Involved: Medaglia & Murphy’s forensic expert was only able to determine which portions of the network the third party actors accessed, not what information may have been accessed. The portions of the network accessed by the third party contained the tax preparation files Medaglia & Murphy maintains for its clients. Information in Medaglia & Murphy’s tax preparation files varies from file-to-file. However, it commonly includes the following: social security numbers; financial account numbers; draft and completed tax returns; W-2, 1099, 1098, 1095, and other such income and tax forms; contact information; dates of birth; documents provided by clients to support their tax returns; and any other information Medaglia & Murphy may have received from clients.
What Was Done for Affected Individuals: Medaglia & Murphy retained Epiq to provide notification letters, call center services, and credit and identity monitoring and restoration protection to all individuals affected by the incident. The notices were mailed on March 16, 2022. Copies of the letters are attached. One letter is for adult taxpayers with at least one minor dependent, though such taxpayers may also have adult dependents. Another letter is for adult taxpayers with either no dependents or only adult dependents. The third is for adults whose information was in corporate tax returns. The duration of the protection services is two, and the services were offered to all affected adults and minors. Those services provide both credit and identity monitoring as well as dedicated fraud specialists to assist individuals restore their credit and identity in the event they experience any fraud.
Thank you for your attention to this matter. Please do not hesitate to contact us if you have any questions.
