Prosper Data Breach Lawsuit 2026, No Settlement Yet—17.6M Affected, Free Credit Monitoring, How to Join Investigation

The Prosper data breach affected 17.6 million people when unauthorized parties accessed customer and applicant data through database queries between June and August 2025. The breach was discovered on September 1, 2025, and notification letters began on December 9, 2025. As of February 2026, there is no settlement or claim form—only ongoing investigations by multiple law firms. Prosper offers two years of free credit monitoring through Experian to affected individuals.

Prosper Data Breach Overview

Prosper confirmed in September 2025 that an unauthorized party gained access to certain systems and acquired sensitive information including names, Social Security numbers, IP addresses, physical addresses, government-issued IDs, income levels, and email addresses.

The breach involved unauthorized database queries over several months, raising concerns about access controls, monitoring, and delayed detection. According to Prosper’s own disclosure, hackers ran queries against databases containing customer and applicant information from June through August 2025—meaning sustained access over time, not a single intrusion.

The breach occurred between April 29, 2025, and September 2, 2025, affecting 13,076,476 individuals in the United States, including more than 1.1 million in Texas, nearly 190,000 in Massachusetts, over 33,000 in Montana, nearly 250,000 in Washington, and more than 1,000 in Iowa.

Current Litigation Status (No Settlement Yet)

Several class action lawsuits have already been filed as of February 2026, but there is NO settlement, NO claim form, and NO compensation available yet. The cases are in early investigation stages.

Multiple law firms are actively investigating claims on behalf of affected individuals, including:

• Morgan & Morgan
• Labaton Keller Sucharow
• Scott+Scott Attorneys at Law
• Stueve Siegel Hanson
• Coulson P.C.
• Shamis & Gentile P.A.

The lawsuits typically allege negligence, breach of implied contract, breach of fiduciary duty, violations of the Federal Trade Commission Act, and various state consumer protection laws.

Who May Be Eligible for Future Claims

You may qualify for future compensation if:

• You were a Prosper customer or loan applicant
• Your data was compromised in the April-September 2025 breach
• You received a data breach notification letter from Prosper in December 2025 or later

Those who sign up for mass arbitration claims could be entitled to anywhere from $550 to over $1,000 under state consumer protection and privacy laws, though there are no guarantees. If you’re a current or former Prosper member or accountholder and live in California, New York, or Virginia, some law firms are prioritizing those states.

What Data Was Exposed

According to Prosper itself, “we have evidence that confidential, proprietary, and personal information, including Social Security numbers, was obtained, including through unauthorized queries made on Company databases that store customer and applicant data”.

The exposed information may include:

• Full names
• Social Security numbers
• Dates of birth
• Government-issued ID images (driver’s licenses, passports)
• Physical addresses
• Email addresses
• IP addresses
• Income levels
• Financial account information
• Tax data
• Credit application details

Free Credit Monitoring Available

Prosper offers two years of complimentary credit monitoring and identity restoration services through Experian to affected individuals. This service can help detect signs of identity theft or fraud.

To enroll, follow the instructions in your breach notification letter from Prosper. If you believe you’re eligible but didn’t receive a letter, contact Prosper directly.

What You Must Know

No Action Required to Join Lawsuits: You typically don’t need to take action to join when class action lawsuits are initially filed. If cases result in settlement, affected individuals will receive notice with claim instructions.

You Don’t Need Proven Fraud: You may qualify for compensation even without proven identity theft, because time spent mitigating risk and long-term exposure are recognized harms.

Mass Arbitration vs. Class Action: Some law firms are pursuing mass arbitration, which is different from a class action lawsuit and involves hundreds or thousands of consumers filing individual arbitration claims against the same company at the same time. It costs nothing to sign up, and attorneys only get paid if they win your claim.

Tax Implications: If settlements are eventually reached, payments will likely be taxable income.

Common Mistakes to Avoid

Don’t ignore breach notification letters thinking they’re scams—verify them by calling Prosper directly at their published customer service number. Don’t assume you’re not affected just because you haven’t experienced fraud yet—data is often sold or misused months or years later.

Don’t wait indefinitely to join investigations—statutes of limitations typically give you 2-4 years from breach discovery to file claims. For more context on similar financial data breach lawsuits, see our coverage of AT&T Class Action Lawsuit Sending $7,500 Settlement Checks After Two Massive Data Breaches Exposed 73 Million Customers’ Most Sensitive Info.

2025-2026 Updates

September 1, 2025: Prosper discovered unauthorized activity on its systems.

December 9, 2025: Prosper began notifying affected consumers by mail, email, and through a dedicated website.

December 2025-February 2026: Multiple law firms filed class action lawsuits and began investigating claims.

As of February 2026: No settlement exists. Cases are in early litigation stages.

What to Do Next

Enroll in Free Credit Monitoring: If you received a Prosper breach notification, enroll in the two years of free Experian credit monitoring. This is separate from any future settlement benefits.

Monitor Your Accounts: Regularly review account statements and credit reports for unauthorized activity. Report suspicious transactions immediately.

Join Investigation (Optional): If you want to actively participate in litigation or mass arbitration, contact one of the investigating law firms. This costs nothing and attorneys only get paid if you win.

Document Everything: Save your breach notification letter, document any fraud or identity theft, keep records of time spent addressing the breach, and save receipts for out-of-pocket expenses like credit monitoring.

When Legal Advice May Help

Consider consulting an attorney if you suffered substantial identity theft or financial losses before receiving notification, if you’re considering opting out of future class actions to pursue individual claims, or if you have questions about which legal approach (class action vs. mass arbitration) makes sense for your situation.

Similar to cases like Conduent Data Breach Update, 14.7 Million Victims In Texas Alone, 10+ Class Actions Filed, Free Credit Monitoring Deadline March 31, 2026, large-scale healthcare and financial data breaches often take 1-3 years to reach settlement.

Where to Find Official Information

Prosper’s Official Breach Notice: prosper.com/blog/prosper-notice-of-data-breach

Investigating Law Firms:

• Morgan & Morgan: forthepeople.com/practice-areas/prosper-data-breach
• Labaton Keller Sucharow: lantern.labaton.com/case/prosper
• Scott+Scott: scott-scott.com/consumer-cases/prosper-data-breach
• Stueve Siegel Hanson: stuevesiegel.com/what-investigations-Prosper-Data-Breach

FTC Identity Theft Resources: IdentityTheft.gov

FAQs

What is the Prosper data breach lawsuit about?
Class action lawsuits allege Prosper failed to implement reasonable cybersecurity measures, allowing hackers to access customer and applicant data through unauthorized database queries from April-September 2025. Affected customers or applicants may have valuable legal claims.

Who is eligible to participate?
Current and former Prosper customers or loan applicants whose data was compromised in the April-September 2025 breach. The breach affected 13,076,476 individuals in the United States.

Is there a settlement or claim form available?
No. As of February 2026, there is no settlement, no claim form, and no compensation available. The lawsuits are in early investigation stages.

How do I join the lawsuit?
You typically don’t need to take action when lawsuits are initially filed. If you want to actively participate, contact one of the investigating law firms listed above. It costs nothing to sign up.

What compensation might be available?
Though there are no guarantees, those who sign up for mass arbitration could be entitled to anywhere from $550 to over $1,000 under state consumer protection and privacy laws. Class action settlements vary based on total claims and documented losses.

When will I receive payment?
Payments won’t occur until settlements are negotiated, court-approved, and all appeals resolved—typically 1-3 years from when lawsuits were filed. Given cases were filed in late 2025, payments likely won’t arrive until 2027 or later.

What documentation do I need?
Save your Prosper breach notification letter as proof you’re part of the affected class. For documented loss claims, gather receipts for credit monitoring, identity theft protection, unreimbursed fraudulent charges, and records of time spent addressing the breach.

Last Updated: February 10, 2026

Disclaimer: This article provides information about the Prosper data breach litigation for educational purposes only. It is not legal advice.

No settlement yet. Enroll in free credit monitoring while investigations continue.

Stay informed, stay protected. — AllAboutLawyer.com

About the Author

Sarah Klein, JD, is a licensed attorney and legal content strategist with over 12 years of experience across civil, criminal, family, and regulatory law. At All About Lawyer, she covers a wide range of legal topics — from high-profile lawsuits and courtroom stories to state traffic laws and everyday legal questions — all with a focus on accuracy, clarity, and public understanding.
Her writing blends real legal insight with plain-English explanations, helping readers stay informed and legally aware.
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