Nationwide's £1m laptop fine

NATIONWIDE Building Society has been fined nearly £1 million after the theft of a company computer last year exposed a lapse in information security procedures.

The Financial Services Authority (FSA) said it would levy a 980,000 penalty over Nationwide's failure to put in place "effective systems and controls" to manage information security risks.

The lack of controls came to light after a laptop computer belonging to the building society was stolen from an employee's home last year. In its inquiry the FSA found that Nationwide managers waited three weeks before initiating an investigation into the theft.

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The financial watchdog concluded that the society's security procedures were inadequate, heightening the risk that customers' details could be exploited by criminals.

Margaret Cole, the director of enforcement for the FSA, said that the fine was a "clear, strong message" to other firms about the importance of keeping information secure.

The building society would have been fined 1.4m, the regulator said, had it not taken action to rectify the security lapses. Nationwide holds confidential information on 11 million customers.

The building society said that the computer held customer information but did not contain PINs or passwords.

The building society claimed that the three-week delay, sanctioned by the police, the FSA and the Information Commissioner, was to avoid creating "undue anxiety" to customers and that the laptop did not contain sufficient information to enable identity theft.