Nationwide fined for laptop theft

The financial regulator has fined the Nationwide Building Society almost £1m following the theft of an employee's laptop in August last year.

Nationwide was penalised to the tune of £980,000 for not having adequate information security procedures and controls in place, potentially exposing the society's 11 million customers to an increased risk of financial crime, said the Financial Services Authority (FSA).

'The company's systems and controls should have been robust enough to anticipate equipment theft or loss and to reduce the risk of sensitive data being compromised as a result of such a loss,' said Margaret Cole, FSA director of enforcement.

The building society was not aware that the laptop contained confidential customer information and did not start an investigation until three weeks after its theft from an employee's home. The company took no steps to find out what information it contained when the long-standing staff member went abroad on holiday shortly after the theft, the regulator said.

Nationwide, which is the world's biggest building society, declined to say how many account details were on the laptop, but it said there had been no loss of money from any account and the laptop did not contain PINs, passwords, account balance information or memorable data relating to any customers.

'We have extensive security procedures in place, but in this isolated incident our systems of control were found wanting,' said Nationwide chief executive Philip Williamson.

'We have made changes to fill the gap and improve our procedures further,' he said.

The building society said it and the police believe the laptop was stolen for its use as a computer, rather than for the information it contained.

The FSA said the laptop theft occurred at a time of heightened awareness of information security issues as a result of government initiatives and its own campaign about the importance of information security.

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Further Reading:

US department learns lessons from laptop theft

Laptop thefts highlight need for encryption

Taking the sting out of mobile data theft