A federal court gave new hope this month to victims of data breaches. In the past, most class-action lawsuits filed by victims have been dismissed by courts due to lack of standing—although a victim’s personal data might have been stolen, unless he or she suffered actual damages from identity theft or fraudulent bank card charges—they had no standing to sue under Article III of the Constitution. And since banks promise zero-liability to consumers whose cards are stolen and misused, victims of card breaches suffer no actual losses.
But this month the Seventh Circuit Court, which covers Illinois, Indiana, and Wisconsin, bucked the trend when it ruled that breach victims do have standing, regardless of whether they suffer damages.
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