AT&T Hit With $177 Million Dollar Settlement After Customer Data Breaches

What Happened?

Following two class action lawsuits over customer data breaches, telecommunications giant AT&T will pay $177 million dollars to those who were affected. According to the terms of the settlement, some customers could receive up to $5,000 for the first data breach, and customers affected by the second data breach could receive as much as $2,500. 

The first data breach occurred in April of 2024 and affected seventy-three million AT&T customers. The second breach took place in July 2024 and affected one hundred million customers. AT&T has continued to deny wrongdoing, but the Dallas Circuit Court approved the settlement in June 2025.

Why it Matters

The settlement is one of the largest in AT&T’s history. While the settlement is one of the biggest on record for telecommunications companies, it is still a small fraction of the $122 billion in annual revenue reported by AT&T for last year.

Confidential customer data such as names, social security numbers, and addresses were compromised after hackers breached AT&T servers last year. Millions of customers were potentially affected, and the terms of the settlement specify that in order to receive the largest amounts of compensation, customers must be able to prove a direct link to at least one of the two data breaches.

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According to Mozilla, AT&T disclosed that the phone records of almost all current and former AT&T customers were stolen by hackers in April 2024. The data breach involved data AT&T was storing on a third-party cloud storage company that was left poorly secured. It includes records of calls and texts – including information about who users called and texted, when, and for how long. However, the content of those calls and texts was not part of the breach, meaning hackers did not gain access to it.

AT&T said they expect payments will start to go out sometime in early 2026. Exact dates aren't available but the recent court order approving the settlement lists a notification schedule of Aug. 4, to Oct. 17, 2025. The deadline for submitting a claim is currently Nov. 18, 2025. The final approval of the settlement needs to be given during a Dec. 3, 2025, court hearing for payments to begin.

While the settlement is small compared to the overall annual revenue AT&T generates, the damage to the company’s reputation will likely be worse than the settlement itself. 

How it Affects You

AT&T and other telecommunications companies can legally collect and sell personal data on their customers to third parties. Compromised storage of that kind of data is how both of AT&T’s 2024 breaches occurred. Had AT&T not been collecting and pooling customers personal data there would have been nothing for hackers to steal. 

Because collecting and selling personal data puts customers at risk, critics of AT&T have called for stronger consumer protection laws in the United States.

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