A former Colgate-Palmolive employee sued the company and plan fiduciaries over an alleged security breach and theft of her retirement fund, which she claims is a violation of the Employee Retirement Income Security Act.
“Defendants ignored numerous significant red flags, failed to follow their own procedures, and failed to implement reasonable procedures to detect and prevent fraud and theft of Plan assets,” said the complaint, which was filed July 7 in U.S. District Court in New York.
The lawsuit claims a breach of fiduciary duty and names the defendants as the employee relations committee of Colgate-Palmolive; the plan’s record keeper, Alight Solutions; and the plan’s custodian, Bank of New York Mellon.
Paula Disberry, the plaintiff, worked for Colgate-Palmolive from 1993 to 2004, and became eligible for the company’s retirement plan in 1998. The plan “is a combination of several ‘programs,’ including defined contribution, profit sharing, and employee stock ownership plan features,” according to the lawsuit, Disberry vs. Employee Relations Committee of the Colgate-Palmolive Co. et al.
Starting in January 2020, an individual started taking actions to gain access to Ms. Disberry’s account, including updating the phone number, email address and address on file, creating a new personal identification number, and changing the online user ID and password used to access the account. By the end of March 2020, the individual was able to access the entire balance in Ms. Disberry’s account, which totaled more than $750,000.
Ms. Disberry has lived in South Africa since 2008, yet the individual who accessed her balance changed her address to Las Vegas and was able to access the funds via a mailed check that was later cashed at a Las Vegas bank, the lawsuit said.
“The fact that a person claiming to be a plan participant changed the participant’s contact information such that the phone number and email address were from one country and the mailing address was in a different country should have been a red flag that triggered some further action to confirm the legitimacy of the request,” the complaint said.
Ms. Disberry submitted a claim for plan benefits in October 2021, explaining in her claim letter that she had not requested or authorized any distribution from the plan. In a response letter in April, the plan’s claims administrator “denied her claim, asserting that ‘While it is unfortunate that your information and plan benefit may have been stolen from you,’ ‘the plan had in place reasonable procedures'” that were followed, and the plan was paid according to terms and requirements, the lawsuit said.
Colgate-Palmolive, Alight Solutions and BNY Mellon did not immediately respond to requests for comment.
The Colgate-Palmolive Co. Employees Savings and Investment Plan, New York, had $3.3 billion in assets as of Dec. 31, 2020, the most recent data available.