Nationwide Customers pay the Fine!!??!!

CHR15

Thank heavens I dont bank with them or I would be off like a shot!!

Quote from the BBC

The customers, not the directors, of Britain's biggest building society will pay a £980,000 fine for lapses in data security.

Nationwide was fined on Valentine's day after a laptop was stolen from an employee's home in August.

It took three weeks before the society realised the extent and sensitivity of the customer details on the computer.

But Nationwide has told the BBC that it "would not be fair" if the directors paid the fine.

As a building society Nationwide is owned by its members - the 11m customers - so any penalty in effect comes from their money.

Many are not happy that they will have to pay the penalty for their data being compromised.

Jill called BBC Radio 4's Money Box programme to say: "Because it's a mutual society any fine will have to be picked up by the members because there are no shareholders.

"It's a double whammy. It's bad enough to think your details may have been spread across the globe unnecessarily. But to be told as a member of a mutual society you are going to be fined, that seems a little unfortunate."

If the fine is divided equally among all Nationwide's members the cost amounts to about 8 pence each.

A Nationwide spokesman said because the society has £135bn in assets and reserves the fine should easily be absorbed and that mortgage or savings rates would not change as a direct result of having to pay it.

Other members have suggested that the five directors should pay the fine.

Between them they earned more than £4m in 2005/06, about half of which was in performance-related bonuses.

The Financial Services Authority said it did not have the power to fine directors directly over this breach of its principles.

And Nationwide told the BBC that it would "not be fair" if directors paid after they had helped build Nationwide into the large and successful society it is today.

Data loss

Other members are angry that Nationwide still refuses to confirm whose data was on the laptop that went missing or what information was involved.

In December it wrote to all 11m customers to tell them that the stolen computer did not contain PINs, passwords, balances or memorable data.

But it will not deny that names, addresses, account numbers, e-mails, dates of birth and telephone numbers were on it.
It sends a very important wake-up call particularly to banks and others in the financial sector
Assistant Information Commissioner Phil Jones

The size of the fine - one the biggest in the history of the FSA and the first on a building society - indicates how seriously the regulator viewed the loss.

The Information Commissioner, the body which protects our data, let the FSA take the lead in the investigation of what was almost certainly a breach of the Data Protection rules.

Assistant Commissioner Phil Jones told Money Box: "It sends a very important wake-up call particularly to banks and others in the financial sector and to all organisations that hold personal information."

But he warned that customers could not use the Data Protection Act to find out what data of theirs was on the laptop.

"The obligation is to tell you what information they hold," he said, "but you and I don't have rights to require someone to tell us what data is held in what particular kit in what particular place.

"The Data Protection Act does not require them to go into that sort of details."

However, he confirmed the decision was up to Nationwide: "There is nothing in the Data Protection Act that would stop them passing that information on to customers who asked them."

Link http://news.bbc.co.uk/1/hi/programmes/moneybox/6371089.stm

Kilty_2

Do you think any of the PLC banks would have their shareholders etc take the loss?

Nope, the customers would.

CHR15

Of course not, they are all as bad as one another but it still sucks that their own competence is safeguarded by the very people who keep them employed.

Someones head should roll !!!!!!! the bank can sit pretty laughing!

LittleVoice

Well it's about 8 or 9 pence per member.

If you don't like the way the directors are getting away with it, stand for election to the board and see if they can be replaced that way.

Beate

The more pressing question is: how are they going to pass this fine on? I bet they won't be taking it from the customer's account with a note reading "£0.08 for fine from FSA". They will probably do this in a sneaky, underhand way so they can't be found out (I bet that not all 11 million customers have read the above article). Personally, I think this is despiccable. It might only be 8 pence per customer, but the customer isn't at fault here so passing it on should simply be illegal! And trying to get that back like bank charges will cost you more in postage than it's worth. It's not fair and simply renders all fines to banks useless, if they are allowed to pass the buck to the customer.

Hazzanet

Chances are that it'll be sliced off their retained profit, which would normally be distributed to members via better rates etc.

IMHO it should come off the directors' remuneration rather than from the members' reserves.

I think the key difference to note with Nationwide is where a bank would protect its shareholders by altering the business to accommodate the fine, however Nationwide deal with it, the customer loses out as the customer is the shareholder in effect.

Oh well.

johnmoney05

Well, suppose this is the job what the government does for us! I will be interested to know what will happen if a government staff lost our data like that.

s1h

although to be fair although this is disgusting if they turn plc the customers will get a lot more than 8p

peterg1965

Small price to pay in my opinion, Nationwide are still a great institution and long may it remain the property of its members and not shareholders!

CHR15

I still think it unfair to expect the victims of the lapse to pay.

It's like getting hit by a drunk driver, being awarded compo, and being told to pay the compo Yourself!!

Okay, a bit extreme but the principle is the same.

Yet, some are defending it like it's a good thing!!

Kilty_2

It's not a good thing but was inevitible.

Any bank would do the same. If their savings rates suffer unecessarily then I'll move my savings, simple.