Clients sue LendingTree over security breach

LendingTree customers have filed a class-action lawsuit against the company, claiming it failed to protect their personal information, hurting their credit scores and exposing them to fraud.

The suit, filed in New York last week, comes a month after the Charlotte-based online mortgage company filed its own complaint against former employees and a company it alleges unlawfully accessed confidential customer information and trade secrets.

LendingTree officials declined to comment Thursday.

A pair of New York attorneys filed the suit on behalf of Marvin Garcia and others who provided personal information to LendingTree between January 2006 and May 2008.

According to the complaint, Garcia – a New York customer – submitted a loan request form to the company. Last month, he received a letter from LendingTree announcing the security breach and warning that other companies may have accessed customers' information between 2006 and early 2008 and marketed their own mortgages to them.

Garcia bought a copy of his credit report almost immediately after that and found that his information had been reviewed by nearly a dozen lenders without his permission, severely affecting his credit score, the complaint said.

The lawsuit alleges that LendingTree was negligent in failing to keep its customers' personal information secure and for failing to notify Garcia and other customers of the breach in a timely manner.

LendingTree filed a complaint last month in Mecklenburg County against Jarrod Beddingfield, former senior vice president David Anderson and Closing USA, a national title and escrow company.

A judge issued a restraining order May 1 against the individuals and company, prohibiting them from accessing or using LendingTree's information. Closing USA has denied involvement with the alleged conduct.