- Rackspace is being sued while struggling with the ransomware attack that affected its customers in early December.
- The company admitted that it is a ransomware attack but didn’t share any other information about the incident.
- A law firm named Cole & Van Note and Chris Ondo files class action lawsuits in the Western District of Texas.
On December 2nd, Rackspace Hosted Exchange customers started experiencing problems when they are trying to use the service. Shortly after, the Texas-based company announced that they are dealing with a security incident and decided to shut down its hosted Microsoft Exchange service. While the company was working on the issue, they made another announcement and admitted that it was a ransomware attack, but didn’t provide further details. Finally, the company warned users to be careful about scammers due to possible phishing attacks.
Data breach
While the company is still working on the incident, a California-based law firm named Cole & Van Note has filed a lawsuit, describing the incident as a data breach, although the company didn’t admit a such thing. The lawsuit has been filed in the Western District of Texas. Scott Cole, founder of Cole & Van Note said,
« That Rackspace offered opaque updates for days, then admitted to a ransomware event without further customer assistance is outrageous. Despite hundreds of data breaches every year in this country, I am receiving reports of vulnerabilities in Rackspace’s hosting environment that go back over a year. That, and a seeming lack of backup protocols is why a lawsuit like this is critical. »
In addition to monetary damages, the suit demands Rackspace Technology implement and maintain sufficient security protocols going forward so as to prevent future attacks. Of the numerous cyber-attacks, a growing percentage of them target sensitive business records such as those accessed here, given that such information is highly valuable to cyber criminals.
Chris Ondo also filed a class action lawsuit, accusing the company of failing to protect customer data and of poor communication with customers about the incident. Ondo’s lawsuit is seeking over $5 million in damages. The company’s shares plunged after the incident and the company stated that its Hosted Exchange business can lose revenue due to the attack.