Peter A Clarke

TalkTalk has had a dreadful few years courtesy of data breaches.  In 2016 it received a record fine of £400,000 for theft of personal data involving 157,000 customers which had not been encrypted as a result of a hack in 2015.  It later estimated that the cost of the hack and its subsequent ramifications cost it £35 million to remedy (which I posted on here and here).

Now TalkTalk is back in the wars with the UK Information Commissioner issuing a monetary penalty notice in the sum of £100,000 for failing to look after customer’s data.  This time rogue employees of a third party provider, located in India, accessed data of between 25,000 – 50,000 customers in 2014.  The Information Commissioner’s Office commenced an investigation when it received complaints about spam calls using data available to TalkTalk.  The investigation found structural  weaknesses with no controls restricting access to portals, allowing for wildcard searches and permitting views of up to 500 customers at a time.  Curiously enough there was no evidence that these breaches of the legislation were connected to the spam calls. This is a common feature of investigations in the UK and the US, often times the initial problem is overshadowed by deficiencies which are discovered after a closer inspection.

In Australia organisations and agencies are liable for breaches of data held overseas under Australian Privacy Principle 8.  The problems are just as acute in Australia with third party providers constituting a real weakness in an organisation’s data security. The Australian Privacy Commissioner is now vested with considerable enforcement powers, and has been since March 2014.  It is just the regulators are more effective and much more active in the United States and the United Kingdom.

The ICO media release provides:

The Information Commissioner’s Office has fined TalkTalk Telecom Group PLC £100,000 after it failed to look after its customers’ data and risked it falling into the hands of scammers and fraudsters.

An ICO investigation found TalkTalk breached the Data Protection Act because it allowed staff to have access to large quantities of customers’ data. Its lack of adequate security measures left the data open to exploitation by rogue employees.

The breach came to light in September 2014 when TalkTalk started getting complaints from customers that they were receiving scam calls. Typically, the scammers pretended they were providing support for technical problems. They quoted customers’ addresses and TalkTalk account numbers.

The ICO launched an investigation into how customer details – names, addresses, phone numbers and account numbers – were compromised.

The investigation found the issue lay with a TalkTalk portal through which customer information could be accessed. One of the companies with access to the portal was Wipro, a multinational IT services company in India that resolved high level complaints and addressed network coverage problems on TalkTalk’s behalf.

A specialist investigation by TalkTalk identified three Wipro accounts that had been used to gain unauthorised and unlawful access to the personal data of up to 21,000 customers.

Forty Wipro employees had access to data of between 25,000 and 50,000 TalkTalk customers. Staff were able to:

• log in to the portal from any internet-enabled device. No controls were put in place to restrict access to devices linked to Wipro.
• carry out “wildcard” searches – for example, entering “A*” to return all surnames beginning with that letter. This allowed staff to view large numbers of customer records at a time and to export data.
• view up to 500 customer records at a time.

The ICO found this level of access was unjustifiably wide-ranging and put the data at risk.

Information Commissioner Elizabeth Denham said:

“TalkTalk may consider themselves to be the victims here. But the real victims are the 21,000 people whose information was open to abuse by the malicious actions of a small number of people.

“TalkTalk should have known better and they should have put their customers first.”

The ICO has fined TalkTalk because it breached the seventh principle of the Data Protection Act. It did not have appropriate technical or organisational measures in place to keep personal data secure.

The investigation found that TalkTalk should have been aware of the risks and that the misuse of personal data was likely to cause substantial damage or distress.

It should have been aware of the increasing prevalence of scams and attempted frauds and should have assessed the measures it had in place to mitigate against them.

TalkTalk had ample opportunity over a long period of time to implement appropriate measures, but it failed to do so. It should have made sure the portal could only be accessed from authorised devices and could have taken steps to prevent large-scale accessing and exporting of personal data through the portal.

The ICO investigation did not find direct evidence of a link between the compromised information and the complaints about scam calls.

As is invariably the case the imposition of the fine brings adverse publicity and reputational damage with coverage in the Telegraph, the Guardian and European Communications (to name but a few).  This is particularly damaging for a Telco where reputational loss is acute and customers are extremely sensitive to loss of their data.