24/07/2009

The Financial Services Authority (FSA) has fined three HSBC firms £3 million for failing to comply with IT security and data protection legislation.

According to the FSA, staff working for HSBC Actuaries and Consultants, HSBC Insurance Brokers and HSBC Life UK were not provided with enough training to identify and manage risks related to identity fraud.

The research showed that large amounts of electronic data had been sent via couriers or the postal service without being encrypted, meaning confidential details were placed at risk.

Margaret Cole, director of enforcement at the FSA, said: 'These breaches are very disappointing. All three firms failed their customers by being careless with personal details which could have ended up in the hands of criminals.

'It is also worrying that increasing awareness around the importance of keeping personal information safe and the dangers of fraud did not prompt the firms to do more to protect their customers' details.'

Nationwide and Norwich Union are among other financial service providers to have received similar fines from the FSA during the last four years.