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Nationwide fined £980,000 for information security breaches

The FSA has fined Nationwide Building Society £980,000 for failing to have effective systems and controls to manage information security risks.
The failing came to light following the theft of a laptop from a Nationwide employee’s home last year.
During the investigation the FSA found Nationwide did not have adequate information security procedures in place potentially exposing customers to an increased risk of financial crime.
The regulator also discovered Nationwide was unaware the laptop contained confidential customer information and did not start an investigation until three weeks after the theft.
FSA director of enforcement Margaret Cole says: “Nationwide is the UK’s largest building society and holds confidential information for over 11 million customers. Nationwide’s customers were entitled to rely upon it to take reasonable steps to make sure their personal information was secure.
Firms’ internal controls are fundamental in ensuring customers’ details remain as secure as they can be and, as technology evolves, firms must keep their systems and controls up-to-date to prevent lapses in security.
The FSA took swift enforcement action in this case to send a clear, strong message to all firms about the importance of information security.”
Nationwide chief executive Philip Williamson says: “We have extensive security procedures in place, but in this isolated incident our systems of control were found wanting. We have made changes to fill the gap and improve our procedures further. Towards the end of last year I sent a letter to every one of our members telling them about this matter and apologising for any concern it may have caused them.”


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