The medical billing portal American Medical Collection Agency (AMCA) has become a victim of a recent data breach that has exposed private financial information of at least 20 million Americans who used the biller’s portal to pay for their diagnostic tests in different laboratories across the U.S. The aftermath of the said data breach has become so costly for the company that it decided to file for bankruptcy to pay its creditors.
The data breach has exposed financial data of 20 million people including their names, phone numbers, dates of birth, home addresses, social security numbers, credit card numbers, and other bank details. Because of this, AMCA together with its partner laboratories are now facing at least 19 class action suits and a federal investigation.
A “cascade of events” forced the company to request for bankruptcy. “Almost immediately upon learning of the breach, LabCorp unqualifiedly and indefinitely terminated its relationship with the Debtor,” the filing reads. “Soon after, Quest Diagnostics, Conduent, Inc., and CareCentrix, Inc. which together with LabCorp were the Debtor’s four largest clients, stopped sending new work to the Debtor, and all terminated or substantially curtailed their business relationships with the Debtor.”
According to the filing, the company incurred massive costs in order to mitigate the situation, costs that are beyond the ability of AMCA to pay. Also, AMCA was also unable to determine exactly who are and what data was affected by the recent data breach, forcing them to pay out over $3.8 million to inform over seven million people who have potentially been impacted via mail. Data shows that this amount alone is more than that the company can take forcing them to take out a loan from the CEO and founder, Russell Fuchs.
As a result, the company was forced to lay off at least 88 employees they could no longer afford their services. Meanwhile, AMCA’s CEO pleads the court to make sure that while the bankruptcy proceedings are ongoing, the remaining 25 employees of the company will be paid.