The Information Commissioner has issued a record £400,000 monetary penalty notice to TalkTalk Telecom Group plc for failing to keep personal data secure, in breach of the Data Protection Act 1998.
The ICO's investigation found that TalkTalk had failed to have appropriate security measures in place which could have prevented the cyberattack.
The Information Commissioner has the power to impose a civil monetary penalty (up to a maximum of £500,000) for serious contraventions of the Data Protection Act 1998 (DPA) under section 55A of the DPA
The seventh data protection principle (Part 1, Schedule 1 to the DPA) provides that "[a]ppropriate technical and organisational measures shall be taken against unauthorised or unlawful processing of personal data and against accidental loss or destruction of, or damage to, personal data".
A hacker managed to access the personal data of 156,959 customers, which included their names, addresses, dates of birth, phone numbers and email addresses. In relation to 15,656 of these customers, the hacker was able to access bank account details and sort codes.
Back in 2009, TalkTalk acquired Tiscali's UK operations, whose setup included webpages which were still available via the internet in 2015. This meant that the hacker was able to access a database which held customers’ personal information.
The hacker was therefore able to extract personal details of TalkTalk’s customers from the database using a well-known technique called a “structure query language injection” between 15 and 21 October 2015.
Two earlier attacks in July and September 2015 should have alerted TalkTalk to the vulnerability of this data. Despite a fix for the bug being available for three and half years, TalkTalk explained that it was not aware that the database software was no longer supported by the provider, nor that it was affected by a bug. If the fix for the bug had been used by TalkTalk, the hacker would not have been able to bypass access restrictions.
Criminal proceedings against a teenager (accused of hacking and then attempting to blackmail TalkTalk) continue separately.
The ICO found that TalkTalk failed to have appropriate security measures in place to protect the personal data it was responsible for. This was in breach of the seventh principle of the DPA.
It is all the more important to implement adequate security measures to protect personal data when financial information is concerned, especially when customers expect that their information will be held securely.
Although the hack was a criminal attack, it had apparently gone unnoticed by TalkTalk to have adequately robust security in place. In addition, it was found that due to TalkTalk’s abundant financial and staffing resources, there was no excuse for failing to take reasonable steps to prevent the breach.
This case sends a strong message to businesses of the importance of keeping personal data secure, particularly financial information. Failure to do so can cost customers, money and reputation. It was reported that the attack had cost TalkTalk £42 million and led to the loss of 101,000 subscribers.
The Commissioner emphasised that cybersecurity should not be seen as an IT issue but a boardroom issue. Businesses must be diligent and vigilant in the protection of personal information,
The Information Commissioner (Elizabeth Denham) has warned businesses that they must be both diligent and vigilant in protecting personal information, not only given their legal obligations, but also because of their duty to customers. As an employer, ensure that you take all reasonable steps so that customer information is kept secure and complete regular checks on your databases to ensure they are free from bugs and viruses.
The ICO has published best practice guidance on avoiding common IT security vulnerabilities that lead to data security breaches, which can be found on their website.