FSA fines HSBC 3.2m
BANKING giant HSBC has been slapped with a £3.2m fine for losing a floppy disk and CD containing customer details in the post and leaving client files out on desks.
The bank now features in the top-ten biggest fines handed out by City watchdog Financial Services Authority (FSA), after the regulator said it made repeated warnings over client information security that were ignored.
The stringent fine comes amid an increasing focus on identity fraud, and as the FSA fights prove it can keep order in the City amid a policy decision to scrap the regulator by the Conservative Party.
The FSA said in April 2007 HSBC Actuaries lost an unencrypted floppy disk in the post with 1,917 pension customers’ names, addresses, dates of birth and national insurance numbers. The division was warned, as were HSBC Insurance Brokers and HSBC Life, about the need for stronger data controls but then in February 2008 the latter lost an unencrypted CD in the post with 180,000 policyholders’ details, the FSA said.
The FSA said the fines also come after an investigation found other incidences of unencrypted data being sent through the post by HSBC, and “confidential information about customers was also left on open shelves or in unlocked cabinets.”
“These breaches are very disappointing,” said FSA enforcement director Margaret Cole.
HITTING WHERE IT HURTS THE FSA’S TOP-TEN BIGGEST FINES
COMPANY/INDIVIDUAL RULE BREACH FINE (£M)
Royal Dutch Shell companies Market abuse 17
Mr Stewart McKegg Profiting from insider dealing 14.4
Citigroup Global Markets Breaching FSA principles 13.9
Alliance & Leicester Failings in payment protection insurance telephone sales 7
Deutsche Bank Breaching FSA principles 6.3
Credit Suisse Breaching FSA principles 5.6
Aon Failings over bribery and corruption controls 5.2
Credit Suisse First Boston Int. Trying to mislead Japanese regulatory and tax authorities 4
HSBC companies Failings over data security systems and controls 3.2
Abbey National companies Money laundering and systems and controls rule failings 2.3