Wealth Manager - the site for professional investment managers

Register to get unlimited access to all of Citywire’s Fund Manager database. Registration is free and only takes a minute.

HSBC hit with £3m fine over customer protection

Global banking giant HSBC has been fined more than £3 million by the Financial Services Authority (FSA) for failing to protect customers’ confidential details.

The FSA said three of HSBC's businesses – Life UK, Actuaries & Consultants and Insurance Brokers – had made a number of gaffes that put consumers’ personal information at risk.

The fines are centred on two incidents. One dates back to 2007, when HSBC Actuaries lost an unencrypted disk containing information, including dates of birth and national insurance numbers, of nearly 2,000 pension scheme members.

The other event, in February last year, saw HSBC Life lose an unencrypted CD containing the details of 180,000 policy holders.

The FSA said the incidents could have helped criminals steal customers' identities, and it therefore fined HSBC Life £1.61 million and the Actuaries business £875,000. HSBC Insurance was fined £700,000.

The financial watchdog also criticised HSBC's training methods, noting that staff were given insufficient training on how to identify and manage risks such as ID theft.

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

She said: 'All three firms failed their customers by being careless with personal details that could have ended up in the hands of criminals. 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.

HSBC said in a statement that it was doing everything in its power to prevent similar incidents happening in the future.

Clive Bannister, group managing director of HSBC Insurance, said: 'Keeping our customers’ data confidential and secure is vitally important to everyone at HSBC. We hold ourselves to the highest standards, but it is clear that in these instances we have fallen short, which we sincerely regret.'

Bannister added that although the situation was serious, no customer had actually reported any loss as a result of the incidents, and he said having taken steps to avoid a recurrence customers could 'have confidence that we are doing everything we can to protect their privacy.'

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Play JPM’s Negyal: Back divis to temper EM volatility

JPM’s Negyal: Back divis to temper EM volatility

Omar Negyal, co-manager of the JPMorgan Global Emerging Markets Income trust, says a dividend approach to emerging markets reduces the volatility of investing in the asset class.

Play WMR: Why Russia will lose this war

WMR: Why Russia will lose this war

Author and journalist Adam Lebor believes a perfect storm is brewing when it comes to the Russian economy. .

Play WMR: Gerard Lyons warns Asia is the real risk, not Russia & Ukraine

WMR: Gerard Lyons warns Asia is the real risk, not Russia & Ukraine

Chief economic adviser to London mayor Boris Johnson outlines the geo-political risks in Asia and explains why the risk of another eurozone crisis must not be underestimated.

Your Business: Cover Star Club

Profile: 'new normal' now is as dangerous as when it was applied to tech

Profile: 'new normal' now is as dangerous as when it was applied to tech

7IM's CIO Chris Darbyshire says he has been re-energised by his new role, but has little time for 'new normal' doom-mongers

Wealth Manager on Twitter