Lost CD may put pension holders in peril
HMRC dodges cryptic question
Thousands of customers of UK insurer Standard Life have been left at risk of fraud after their personal details were lost by HM Revenue & Customs (HMRC).
Data on 15,000 pension policy holders, sent in a CD from HMRC offices in Newcastle to Standard Life's Edinburgh headquarters by courier, never arrived.
The lost disc contained names, national insurance numbers, dates of birth, addresses, and pension data. Information such as this would easily lend itself to abuse by crooks if it fell into the wrong hands. Providing fraudsters were able to read the disc they might be able to apply for loans or credit cards under false names.
News of the loss of the disc, which should have arrived five weeks ago, emerged over the weekend after Standard Life sent out warning letters to its clients. Standard Life's director for customer services, John Gill, told BBC Radio 4's Money Box program: "We have no evidence that the disc has fallen into third party hands and we have also been closely monitoring all the accounts and have seen no indications of any suspicious activity."
UK tax authorities reportedly routinely send confidential data on taxpayers to their pension providers via CD, a procedure that has been found wanting of late. A second CD containing information on customers of an unnamed second insurer has also gone missing, the BBC reports.
HM Revenue has declined to confirm whether the data on the disks was encrypted or not.
This latest in a seemingly never-ending series of security breaches by large organisations on either side of the Atlantic shows the issue is far from confined to lost laptops or leaky database servers. Some organisations have become repeat offenders.
Only last month, for example, HM Revenue lost a laptop containing the personal details of 2,000 people with investment ISAs. In May, Standard Life sent around 300 policy documents to the wrong people.
Security vendors were quick to point to the benefits of encryption in preventing customer information security breaches. "This latest leak shows how easy it is for personal data to go astray, even when being delivered personally," said Nick Lowe, Check Point's regional director for Northern Europe.
"Data needs to be protected wherever it is, whether it's in motion on a CD or laptop computer, or at rest within the company network. Strong encryption really is the only way to achieve this, and the encryption should be automated so that it happens without users' intervention." ®
Never send unecrypted CD's
The problem businesses have is that no one offers "native" CD encryption. Of course this isnt an excuse BUT I have just completed the worlds largest single domain encryption program with one of the UK's largest banks and along the line we put in place a system of sending encrypted memory sticks to HMRC. Initially they were hesitant to accept this BUT we got there in the end.
There is no excuse for Standard Life, quite simply unencrypted CD's should NEVER have been used in the first place.
The other thing is that direct connect, a system that allows you to send info to the other end securely, costs an absolute bomb. However what is the value of that lost CD? Most organisations wont look at the cost of a cd being lost and in all honesty the cost of that lost CD is probably a lot higher than the costs of direct connect?
Naturally, as Im the worlds leading integrator of security encryption, I remain available for all massively over priced contracts :)
I'm an Information Security Professional and a victim
I'm an Information Security Professional and a victim of this, our government (rightly) expect companies to secure people's personal information (DPA), yet here is a government department who has yet again breached our trust.
There are several secure alternatives that the HRMC could of used to transfer this type of data to Standard Life, pretty much all of them are actually cheaper and more efficient that putting non-encrypted data on a CD and shipping by a courier.
Why has it taken so long to disclose? They knew about the lost CD for over a month before telling the folks that were affected.
Finally when I called them on Monday for more info about it, I was completely misled, and was told the data on the CD was encrypted, when it wasn't, which I had confirmed today.
This is just complete incompetence on HMRC's part, and it's not like it's the first time they done this sort thing, if it was a company rather than government I would certainly expect to see a big fine.
Read my Blog blog.itsecurityexpert.co.uk for more details.
I seem to remember reading ages ago that you have to pay VAT on services such as accountancy data provided over the internet, so maybe they are penny pinching?
A quick search found http://www.accountancyage.com/financial-director/features/2159231/directive-clarifies-digital-vat but I thought there was an article on this site about it months ago.