FSA set to hit Skipton with heavy fine for data breach

By JEFF PRESTRIDGE, MONEY EDITOR AT LARGE
Updated:

Skipton Building Society faces a heavy fine from the Financial Services Authority after a serious breach of data security procedures that resulted in more than 3,000 savers receiving financial details about other customers of the mutual.

The blunder is the latest embarrassment for chief executive David Cutter - only 13 months into the job.

Earlier this month he controversially reneged on a mortgage rate guarantee to more than 64,000 borrowers because of the society's financial problems.

Financial Services Authority

Firm action: The FSA takes a tough stance on data security breaches

Last week he also authorised 90 redundancies among the group's 1,270 staff.

When Skipton mailed 108,000 account statements to savers last weekend, 3,115 went out with the name, account number, balance and interest earned in the previous year of different customers printed on the reverse of the letters.

On Friday, Skipton stressed the details did not include customers' addresses, dates of birth or 'other identifying details', so their accounts could not be plundered.

It also said the accounts were all passbook operated, which meant withdrawals could be made only with an authorised signature. None of the accounts was accessible via the internet.

In a statement to Financial Mail, Skipton said: 'We are writing to those affected to apologise and to reassure them that the correspondence contained insufficient information to enable any unauthorised transactions on their accounts.

'We are also offering to change the account numbers of any customers seeking additional peace of mind.'

It is understood that the FSA is aware of the blunder, although it would not confirm this. But the FSA takes a tough stance on data security breaches.

Two years ago it fined Nationwide Building Society £980,000 after a laptop containing confidential customer data was stolen from one of its employee's homes.

When issuing the fine, Margaret Cole, director of enforcement at the FSA, said firms 'must keep their systems and controls up to date to prevent lapses in security' and that the fine should send a 'strong message to all firms about the importance of information security'.

Most watched Money videos