15 December 2017
visit www.solutions.lexisnexis.com

UK banks breaching data protection rules - Which?

26 May 2011  |  10101 views  |  1 London skyline - old Natwest tower and gherkin

The UK's biggest banks and building societies are regularly breaching data protection rules, according to figures obtained by consumer group Which? under the Freedom of Information Act.

The consumer group says that there were 515 complaints lodged with the Information Commissioner's Office (ICO) about possible breaches by eight of Britain's biggest banks and building societies between August 2009 and August 2010 where the office thought it was likely they had broken the rules.

Barclays was the bank with the most suspected breaches with 116 complaints, followed by Lloyds TSB with 114 and Santander with 103.

Over half of complaints arose from firms failing to provide customers with copies of the data held about them properly. Other potential breaches include banks holding inaccurate data about customers, failing to follow security measures and the disclosure of information to third parties.

Which? says that with just 13% of Brits having heard of the ICO, the number of complaints made could be just the tip of the iceberg.

Which? executive director, Richard Lloyd, executive director, Which? says: "Banks and building societies hold incredibly sensitive information and the impact on customers can be serious if they mishandle it, from affecting credit ratings to leaving people open to fraud. Consumers who suffer financial loss or stress as a result of data mismanagement by firms should be entitled to compensation."

The group is also attacking the banking industry over its complaints handling procedures following yesterday's decision by the Financial Services Authority to fine Bank of Scotland £3.5 million over failures.

The FSA says BoS wrongly rejected as many as 45% of 2592 complaints it received about retail investment products between July 2007 and October 2009. The bank failed to investigate complaints properly and analyse trends in its decisions, says the watchdog.

As well as the fine, BoS has paid £2.4 million in compensation and is expected to pay out another £15 million.

Tracey McDermott, acting director, enforcement and financial crime, FSA, says: "This fine reflects BOS's serious failure to treat vulnerable customers fairly. The firm's failure to ensure it had a robust complaint handling process in place led to a significant number of complaints being rejected when they should have been upheld."

Peter Vicary-Smith, CEO, Which? adds: "This case reaffirms the need for a fundamental overhaul to the way the banking industry deals with complaints and illustrates why the Financial Ombudsman Service is so essential. The Government must resist any pressure from the banking industry to weaken it."

Comments: (1)

A Finextra member
A Finextra member | 31 May, 2011, 15:04

The press release out from Which? linking complaints figures with data breaches is quite misleading. For example, the statement says that Barclays was 'the bank with the most data breaches', but from the figures we can see that they just received more complaints relating to breaches, which is not the same thing at all. Also, roughly speaking, the biggest banks received the most complaints. Again, no surprise there, they have more customers.

Not only are complaints about breaches very different to actual breaches, but over half of those complaints were about firms failing to properly provide customers with copies of the data held about them. This is not a data breach at all.

Whilst these findings are interesting, the figures don't tell us anything about the state of data protection in the industry. Banks take the protection of their customers' sensitive information very seriously and constantly evaluate their data security defences and procedures in order to protect themselves against the possibility of data breaches.

Be the first to give this comment the thumbs up 0 thumb ups! (Log in to thumb up)
Comment on this story (membership required)

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board: sign up now

Related stories

RBS and NatWest fined £2.8m for poor customer complaint handling

RBS and NatWest fined £2.8m for poor customer complaint handling

11 January 2011  |  8580 views  |  0 comments
Banks giving offline Brits a raw deal - Which?

Banks giving offline Brits a raw deal - Which?

27 September 2010  |  5278 views  |  0 comments
Yorkshire Building Society censured over stolen unencrypted laptop

Yorkshire Building Society censured over stolen unencrypted laptop

26 August 2010  |  9006 views  |  1 comments
UK's ICO gets power to hit firms with £500k fines for data breaches

UK's ICO gets power to hit firms with £500k fines for data breaches

13 January 2010  |  5427 views  |  0 comments
UK data protection watchdog slams firms for security breaches

UK data protection watchdog slams firms for security breaches

11 July 2007  |  7477 views  |  0 comments

Related company news


Related blogs

Create a blog about this story (membership required)
visit www.aciworldwide.comvisit www.niceactimize.comvisit www.solutions.lexisnexis.com

Top topics

Most viewed Most shared
Deutsche Bank paper hails 'huge' blockchain potentialDeutsche Bank paper hails 'huge' blockchai...
10459 views comments | 17 tweets | 25 linkedin
satelliteRipple completes XRP Lockup
9833 views comments | 3 tweets | 2 linkedin
PSD2: Laying the regulatory foundation for a new age in paymentsPSD2: Laying the regulatory foundation for...
9229 views comments | 17 tweets | 36 linkedin
Brits flock to digital-only banksBrits flock to digital-only banks
7350 views 11 comments | 11 tweets | 15 linkedin
Banks and fintech startups join forces on blockchain-based supply chain pilotBanks and fintech startups join forces on...
6705 views comments | 19 tweets | 20 linkedin

Featured job

Competitive base, commission, benefits
London, UK

Find your next job