TalkTalk, a major UK telecoms company, has been fined
£400,000 for a data breach after they were hacked. This is a
record fine given by the ICO (the UK's data protection
authority). Significantly the fine was imposed after a change of
leadership this summer when Elizabeth Denham (previously the
Information Commissioner in the Canadian province of British
Columbia) replaced Christopher Graham as the Information
This record fine followed an in-depth investigation by the ICO
into an attack by hackers on TalkTalk's systems in October
2015. The hackers obtained the details of 156,959 customers,
including their names, addresses, dates of birth, phone numbers and
email addresses. In 15,656 cases, the hackers also gained access to
bank account details and sort codes. The maximum fine the ICO can
require companies to pay is £500,000.
The attack exploited vulnerabilities in webpages acquired by
TalkTalk from Tiscali in 2009 to access a database. In handing out
the fine, the ICO held that there had been elementary errors in
TalkTalk's efforts to safeguard personal data including:
As part of the Tiscali acquisition,
TalkTalk was unaware of webpages it had acquired;
A bug in the database software, for
which a fix was available, remained unfixed (allowing the hackers
to bypass the database access restrictions);
Two previous attacks to the same
webpages in July and September 2015 should have alerted TalkTalk to
the vulnerabilities in the webpages that were hacked;
The database was outdated and could
have been upgraded to a newer version unaffected by the bug in
TalkTalk failed to proactively
monitor its own activities – had it done so it would have
discovered the vulnerabilities.
The new Information Commissioner, stated
"TalkTalk's failure to implement the most basic cyber
security measures allowed hackers to penetrate TalkTalk's
systems with ease," and that "in spite of its
expertise and resources, when it came to the basic principles of
cyber-security, TalkTalk was found wanting". The
contravention was of a kind likely to cause substantial damage and
substantial distress to its customers and TalkTalk should have
identified the risks and taken appropriate action to prevent the
data from being hacked.
The Information Commissioner further stated that
"...cyber security is not an IT issue, it is a boardroom
issue. Companies must be diligent and vigilant. They must do this
because they have a duty under law, but they must also do this
because they have a duty to their customers." This is a
stark statement of the position of the new Information Commissioner
and demonstrates why now, more than ever, boards and top-level
executives must proactively address and be seen to be addressing
A separate criminal investigation into this matter is ongoing.
We will keep you posted of any development.
In this article Filippo Noseda examines the impact of the Common Reporting Standards (CRS), based on practical examples of data transfer and data breaches and analysed in the light of general tax law principles.
Four years after the overhaul of European data protection laws began, the final text of the new General Data Protection Regulation (GDPR) was approved in Spring 2016 and the new rules will come into effect on 25 May 2018.
This update is dedicated to covering the latest legislative developments affecting the way data is managed and protected, as well as reporting on the most recent news governing data breaches and industry developments.
This week TalkTalk was fined £400,000 by the Information Commissioner's Office (ICO) for breaching the Data Protection Act. This is the largest fine, to date, that the ICO has imposed – which emphasises the seriousness of the breach.
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