HSBC fined £3.2m for data security failings

Wednesday 22nd July 2009

HSBC has been fined £3.2 million for failing to protect customers' details.

The data security failings include the loss of an unencrypted CD with the details of 180,000 customers in the post.

The fine from the Financial Services Authority (FSA) came as the watchdog found "large amounts of unencrypted customer details had been sent via post or courier to third parties".

HSBC Life was fined £1,610,000, HSBC Actuaries was fined £875,000 and HSBC Insurance Brokers was fined £700,000, after it was found confidential information was left on open shelves and in unlocked filing cabinets, while staff had insufficient training in identity theft risks.

Margaret Cole, director of enforcement at the FSA, said the breaches were "very disappointing".

"All three firms failed their customers by being careless with personal details which could have ended up in the hands of criminals," she said.

"It is also worrying that increasing awareness around the importance of keeping personal information safe and the dangers of fraud did not prompt the firms to do more to protect their customers’ details."

As HSBC cooperated with the FSA, 30 per cent was knocked off the fines – but they still remain the highest from the watchdog for data breaches.

Recently, Nationwide was fined £980,000 and Norwich Union was fined £1.26 million for failings over data security lapses and fraud.

HSBC has now improved staff training and all electronic data is encrypted when in transit.

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