Nationwide fined £980,000

Nationwide Security Breaches

The Nationwide Building Society has been fined just shy of £1million by the City watchdog over breaches in security.

The fine follows the theft of a laptop from a Nationwide employee’s home which contained confidential customer data.The Financial Services Authority (FSA) found security was not up to standards after the man had put details of nearly 11 million of the companies’ customers on his computer.

The FSA also found that the Nationwide did not start an investigation until three weeks after the theft occurred.

Financial crime

The Building Society claimed that the information on it couldn’t have been used for identity fraud as there were no PIN numbers, passwords or account balance information on it.

However, it appears the laptop may have contained names, addresses, account numbers and other sensitive data.

“Nationwide is the UK’s largest building society and holds confidential information for over 11 million customers,” said Margaret Cole, at the FSA.

“Nationwide’s customers were entitled to rely upon it to take reasonable steps to make sure their personal information was secure,” she added.

Theft

The FSA’s investigation showed that the building society had not known that the laptop contained any confidential customer information at all.

The laptop was stolen from the home of a long-time and trusted employee of the company who needed access to the data.

However, despite reporting the theft of the laptop promptly, he did not tell his employer immediately what was on it. Only three weeks later did it come to light that such sensitive data has been stolen.

“The failure to manage or monitor downloads of very large amounts of data onto portable storage devices meant that Nationwide had limited control over information held in this way or how it was used, ” said the FSA.

The Nationwide then wrote to all its customers apologising for the security breach.

Its chief executive, Philip Williamson, repeated that apology.

“I wish to emphasise that there has been no loss of money from our customers’ accounts as a result of this incident,” he said.