Tesco Bank fined £16.4m for failings over 2016 Cyber attack on it’s customers
Tesco Bank has been fined £16.4m by the UK financial regulator for failings surrounding a cyber attack on its customers in November 2016.
The Financial Conduct Authority said the bank had failed to exercise due skill, care and diligence in protecting its personal current account holders.
Tesco Bank said the attack led to 34 transactions where funds were taken from customers’ accounts.
It added it was “very sorry” for the impact the attack had on its customers. The FCA said that attack, which netted the fraudsters £2.26m, had been largely avoidable and that Tesco had not responded to the attack with sufficient rigour, skill nor urgency.
Mark Steward, executive director of enforcement and market oversight at the FCA, said the regulator would not put up with such behaviour.
“The fine the FCA imposed on Tesco Bank today reflects the fact that the FCA has no tolerance for banks that fail to protect customers from foreseeable risks,” he said.
“In this case, the attack was the subject of a very specific warning that Tesco Bank did not properly address until after the attack started. This was too little, too late. Customers should not have been exposed to the risk at all.”
The FCA said cyber attackers had exploited deficiencies in Tesco Bank’s design of its debit card, its financial crime controls and in its financial crime operations team.
Gerry Mallon, Tesco Bank’s chief executive, said:-“We are very sorry for the impact that this fraud attack had on our customers. Our priority is always the safety and security of our customers’ accounts and we fully accept the FCA’s notice.
“We have significantly enhanced our security measures to ensure that our customers’ accounts have the highest levels of protection. I apologise to our customers for the inconvenience caused in 2016.”
Tesco Bank’s co-operation with the FCA’s inquiry, and its agreement to an early settlement, meant the fine was reduced from £33.6m.