£700,000 FSA penalty for HSBC Insurance Brokers

HSBC Insurance Brokers has acknowledged the FSA’s punishment over customer data fears and insists that the company has not lost any private information.

The broker was fined £700,000 last week after other HSBC companies within the bank were fined more than £3m over loopholes in customer data security.

The fine, which included a £1.61m penalty for HSBC Life UK and £875,000 for HSBC Actuaries, came after the FSA discovered that the companies did not have adequate systems and controls in place to protect customers’ confidential details from being lost or stolen.

HSBC Insurance Brokers’ chief executive, Philip Gregory, said the broker had not lost any data, nor had any customer been affected by financial crime as a result of its actions.

He said the company had reviewed its procedures and had introduced “more robust data security controls”.

On two occasions, HSBC companies lost customer data in the post. HSBC Actuaries lost a floppy disk containing the personal information of 1,917 pension scheme members and HSBC Life lost a CD containing the details of 180,000 policyholders.

Margaret Cole, director of enforcement at the FSA, said the breaches were disappointing.

“In areas where we have previously warned firms of the need to improve, people can expect to see fines increase to deter others and change behaviour in the industry,” she said.