Credit reference agency Equifax fined for security breach
The Information Commissioner’s Office (ICO) issued Equifax Ltd with a £500,000 fine (PDF) for failing to protect the personal information of up to 15 million UK citizens during a cyber attack in 2017.
The incident, which happened between 13 May and 30 July 2017 in the US, affected 146 million customers globally.
The ICO investigation found that, although the information systems in the US were compromised, Equifax Ltd was responsible for the personal information of its UK customers. The UK arm of the company failed to take appropriate steps to ensure its American parent Equifax Inc, which was processing the data on its behalf, was protecting the information.
The ICO’s probe, carried out in parallel with the Financial Conduct Authority, revealed multiple failures at the credit reference agency which led to personal information being retained for longer than necessary and vulnerable to unauthorised access.
The investigation was carried out under the Data Protection Act 1998, rather than the current GDPR, as the failings occurred before stricter laws came into force in May of this year. Today’s fine is the maximum allowed under the previous legislation.
The company contravened five out of eight data protection principles of the Data Protection Act 1998 including, failure to secure personal data, poor retention practices, and lack of legal basis for international transfers of UK citizens’ data.
Elizabeth Denham, Information Commissioner said:
“The loss of personal information, particularly where there is the potential for financial fraud, is not only upsetting to customers, it undermines consumer trust in digital commerce.
“This is compounded when the company is a global firm whose business relies on personal data.
“We are determined to look after UK citizens’ information wherever it is held. Equifax Ltd has received the highest fine possible under the 1998 legislation because of the number of victims, the type of data at risk and because it has no excuse for failing to adhere to its own policies and controls as well as the law.”
The ICO found that measures that should have been in place to manage the personal information were inadequate and ineffective. Investigators found significant problems with data retention, IT system patching, and audit procedures. Our investigation also found that the US Department of Homeland Security had warned Equifax Inc about a critical vulnerability as far back as March 2017. Sufficient steps to address the vulnerability were not taken meaning a consumer-facing portal was not appropriately patched.
The personal information lost or compromised during the incident ranged from names and dates of birth to addresses, passwords, driving licence and financial details.
Ms Denham added:
“Many of the people affected would not have been aware the company held their data; learning about the cyber attack would have been unexpected and is likely to have caused particular distress.
“Multinational data companies like Equifax must understand what personal data they hold and take robust steps to protect it. Their boards need to ensure that internal controls and systems work effectively to meet legal requirements and customers’ expectations. Equifax Ltd showed a serious disregard for their customers and the personal information entrusted to them, and that led to today’s fine.”
Notes to Editors
- The Information Commissioner’s Office (ICO) is the UK’s independent regulator for data protection and information rights law, upholding information rights in the public interest, promoting openness by public bodies and data privacy for individuals.
- The ICO has specific responsibilities set out in the Data Protection Act 2018 (DPA2018), the General Data Protection Regulation (GDPR), the Freedom of Information Act 2000 (FOIA), Environmental Information Regulations 2004 (EIR) and Privacy and Electronic Communications Regulations 2003 (PECR).
- The General Data Protection Regulation (GDPR) is a new data protection law which applies in the UK from 25 May 2018. Its provisions are included in the Data Protection Act 2018. The Act also includes measures related to wider data protection reforms in areas not covered by the GDPR, such as law enforcement and security. The UK’s decision to leave the EU will not affect the commencement of the GDPR.
- However, due to the timing of certain incidents in this investigation, civil monetary penalties have to be issued under the previous legislation, the Data Protection Act 1998. The maximum financial penalty in civil cases under former laws is £500,000.
- Under past and current law, the ICO can take action to change the behaviour of organisations and individuals that collect, use and keep personal information. This includes criminal prosecution, non-criminal enforcement and audit.
- Since 25 May 2018, the ICO has the power to impose a civil monetary penalty (CMP) on a data controller of up to £17million (20m Euro) or 4% of global turnover.
- The GDPR and the DPA2018 gave the ICO new strengthened powers.
- The data protection principles in the GDPR evolved from the original DPA, and set out the main responsibilities for organisations. Article 5 of the GDPR requires that personal data shall be:
- Processed lawfully, fairly and in a transparent manner in relation to individuals;
- Collected for specified, explicit and legitimate purposes and not further processed in a manner that is incompatible with those purposes;
- Adequate, relevant and limited to what is necessary in relation to the purposes for which they are processed;
- Accurate and, where necessary, kept up to date
- Kept in a form which permits identification of data subjects for no longer than is necessary; and
- Processed using appropriate technical or organisational measures in a manner that ensures appropriate security of the personal data.”
- Article 5(2) requires that “the controller shall be responsible for, and be able to demonstrate, compliance with the principles.”
- Civil Monetary Penalties (CMPs) under past and current law are subject to a right of appeal to the (First-tier Tribunal) General Regulatory Chamber against the imposition of the monetary penalty and/or the amount of the penalty specified in the monetary penalty notice.
- Any monetary penalty is paid into the Treasury’s Consolidated Fund and is not kept by ICO.
- To report a concern to the ICO go to ico.org.uk/concerns.
Guidelines 1/2019 on Codes of Conduct and Monitoring Bodies under Regulation 2016/679