Flagstar Bank suffers a data breach, warns its customers

A recent data breach incident has occurred in the Flagstar Bank and compromised over 800,000 US customers.

This breach is the third incident that compromised Flagstar since 2021. Based on reports, the cyberattack happened in one of Flagstar’s third-party service providers. The affected entity is a Michigan-based financial institution that was one of the most prominent banks in the United States before the New York Community Bank acquired it.

 

The breach on third-party provider Fiserv has led to the compromise of Flagstar Bank data customers.

 

Fiserv, a vendor employed by Flagstar Bank for payment processing and mobile banking services, has suffered a security incident that indirectly affected the financial institution. The firm is one of the companies that fell victim to the MOVEit Transfer data theft attacks.

Hence, the threat actors could have exploited a zero-day vulnerability within the MOVEit Transfer product to breach Fiserv’s systems, allowing them to access Flagstar customer data that Fiserv used to provide its services.

The company redacted some of the details of the compromised data in the breach notification they disseminated to their customers. However, the confirmed data that could have belonged to the stolen information are names and Social Security Numbers.

The breach has compromised approximately 830,000 Flagstar Bank customers in the United States. Unfortunately, the more alarming detail about this incident is that it is the third attack that compromised Flagstar in under two years.

The first breach happened in March 2021 when the Clop ransomware gang infiltrated the institution’s Accellion file transfer server, resulting in the loss of customer and employee information, such as names, addresses, phone numbers, tax records, and SSNs.

June last year, Flagstar revealed another breach involving its corporate network, impacting over 1.5 million US customers. This incident also resulted in information theft, like names and Social Security Numbers, with sensitive information censored in the published notification samples.

Fiserv provides its service to numerous financial institutions. This detail raises questions about the potential impact on other banks and their customers. As of now, the concerned organisations are trying to assess the situation and will provide additional details of the cybersecurity incident.