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Tesco Bank slapped with huge fine over cyberattack

Oct 03

Tesco Bank slapped with huge fine over cyberattack

LONDON, U.K. - Blaming Tesco Bank for failing to 'exercise due skill, care and diligence in protecting its personal current account holders,' the U.K. watchdog has slapped a huge fine on the firm.

Issuing the fine on Monday, the Financial Conduct Authority (FCA) said that Tesco Bank was being fined 16.4 million pounds following the major cyber attack in 2016.

The FCA said in its statement that the attackers took advantages of 'deficiencies' in the design of Tesco Bank's debit card.

Adding that the hackers were able to utilize the 'deficiencies' in the bank's financial crime controls and its financial crime operations team to carry out the hack.

This, FCA said, left Tesco Bank customers vulnerable to a 'largely avoidable incident.'

During the incident in 2016, cyber attackers were able to net 2.26 million pounds in the 48-hour incident in November 2016.

The watchdog, which issued its fine on Monday, said that if Tesco Bank had not provided a high level of co-operation to the FCA and agreed to an early settlement, the lender would have been fined 33.56 million pounds.

In a statement, Mark Steward, the FCA's executive director of enforcement and market oversight, said, '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. 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.'

He pointed out, 'This was too little, too late. Customers should not have been exposed to the risk at all.'

However, the FCA has confirmed that following the attack, Tesco Bank immediately put a 'comprehensive redress' programme in place.

It said that the lender had devoted significant resources to improving the deficiencies that left the bank vulnerable to the attack.

Commenting not he FCA fine, Tesco Bank chief executive Gerry Mallon 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.'

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