HSBC UK fined for privacy breaches

The UK Financial Services Authority (FSA) has fined three HSBC firms over £3 million for not having adequate systems and controls in place to protect their customers’ confidential details from being lost or stolen. These failings contributed to customer data being lost in the post on two occasions.


During its investigation into the firms’ data security systems and controls, the FSA found that large amounts of unencrypted customer details had been sent via post or courier to third parties. Confidential information about customers was also left on open shelves or in unlocked cabinets and could have been lost or stolen. In addition, staff were not given sufficient training on how to identify and manage risks like identity theft.


In April 2007, HSBC Actuaries lost an unencrypted floppy disk in the post, containing the personal information of 1,917 pension scheme members, including addresses, dates of birth and national insurance numbers. In February 2008 HSBC Life lost an unencrypted CD containing the details of 180,000 policy holders in the post. The confidential information on both disks could have helped criminals to steal customers’ identities and commit financial crime.


The firms have taken a number of remedial actions to address the concerns raised, including contacting the customers concerned, improving their staff training and requiring that all electronic data in transit is encrypted.


HSBC Life UK Limited (HSBC Life) was fined £1,610,000, HSBC Actuaries and Consultants Limited (HSBC Actuaries) was fined £875,000 and HSBC Insurance Brokers Limited (HSBC Insurance Brokers) was fined £700,000


HSBC Insurance Brokers, HSBC Actuaries and HSBC Life co-operated fully with the FSA in the course of its investigation. All three firms agreed to settle at the early stage of the FSA’s investigation and qualified for a 30% discount. Without the discount, the fines would have been £1m for HSBC Insurance Brokers, £1.25m for HSBC Actuaries and £2.3m for HSBC Life.

 

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