Equifax first to be hit with maximum £500k data fine

The UK division of Equifax has become the first ever company to be fined the maximum £500,000 for breaking data laws, after it failed to protect the personal information of up to 15 million British citizens during the now infamous cyber attack in 2017.
The Information Commissioner’s Office investigation was carried out under the Data Protection Act 1998, as the failings occurred between May 13 and July 30 last year, before GDPR came into force. Under the new regulation, the maximum fine could have been over £102m, 4% of the firm’s £2.55bn global turnover.
The incident, which happened in the US, affected 147 million customers globally. After initially claiming that “just” 400,000 UK customers had been mildly affected and that financial fraud was “highly unlikely”, Equifax was forced to admit that, in fact, 15.2 million UK records had been exposed.
The ICO probe found that, although the information systems in the US were compromised, 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 investigation, 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 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.
Information Commissioner Elizabeth Denham 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. The 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.
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 showed a serious disregard for their customers and the personal information entrusted to them, and that led to today’s fine.”
Earlier this year, it was claimed that the breach could end up being the most expensive hack in corporate history, with the final bill could topping a staggering $600m (£432m), once regulatory and legal action is completed.
In July, the ICO published a “notice of intent” to fine Facebook the maximum £500,000 for its role in the Cambridge Analytica scandal, however, this has yet to be confirmed.