National Public Data (NPD), one of the largest background check companies in the U.S., has filed for bankruptcy after a crippling cyberattack exposed the personal information of millions of Americans.

The breach, which occurred in late 2023, resulted in hackers leaking millions of sensitive records, including Social Security numbers, birth dates, and other personal data on dark web forums. This intensified fears of widespread identity theft and triggered multiple class-action lawsuits, along with investigations by more than 20 state attorneys general and federal regulators.

In the wake of this overwhelming fallout, NPD’s parent company, Jerico Pictures, filed for Chapter 11 bankruptcy in Florida on October 2. Court documents reveal that “the enterprise cannot generate sufficient revenue to address the extensive potential liabilities, let alone defend the lawsuits and support ongoing investigations.”

Despite having gross revenues of over $1.15 million in 2023, the company lists assets of just over $44,000 and no physical offices, making it impossible to withstand the mounting legal pressures and financial demands triggered by the breach.

Why It Matters: The bankruptcy of NPD underscores the grave financial and reputational risks companies face following major cybersecurity incidents. The breach impacted hundreds of millions of individuals, many of whom may be vulnerable to identity theft for years to come. This case serves as a cautionary tale for businesses that handle large volumes of sensitive information, emphasizing the importance of cybersecurity preparedness, legal compliance, and customer protection. The breach’s scale also highlights the growing intersection of cybercrime, regulatory scrutiny, and the legal consequences that can cripple even major players in the industry.

• Massive Data Breach and Legal Fallout: National Public Data suffered a cyberattack that leaked personal information, including Social Security numbers, addresses, and birthdates of millions. The breach sparked multiple class-action lawsuits and regulatory investigations from over 20 states, pushing the company into bankruptcy.

• Dark Web Exposure: The stolen data was posted on the dark web, where criminals could use it for a wide range of fraudulent activities, including phishing scams and tax fraud. Experts warn that the fallout from this breach could persist for years as malicious actors exploit the exposed information.

• Potential Civil Penalties and Investigations: Attorneys general across the U.S., along with federal agencies like the Federal Trade Commission, are scrutinizing the incident. These investigations and penalties have created insurmountable financial pressure on NPD, compounding the company’s legal woes.

• Bankruptcy and Financial Collapse: The company’s Chapter 11 filing revealed that NPD could not generate enough revenue to cover the extensive liabilities stemming from the breach, including paying for credit monitoring for millions of affected individuals. The company disclosed assets of roughly $44,000 and debts exceeding $3 million.

Go Deeper -> National Public Data Files for Bankruptcy, Citing Fallout from Cyberattack – The Record

After Breach of Billions of Records, National Public Data Files for Bankruptcy – Cyber News