The banking arm of Tesco, the biggest retailer of the United Kingdom, would potentially be facing a fine of more than £30 million. It will likely be imposed by the Financial Conduct Authority (FCA) because of its role in a cyber hack on its systems wherein sensitive customer information was unfortunately compromised.
This evening, some sources told Sky News that Tesco Bank is believed to be contesting the said fine in active talks with the regulator, which could be lessened to a “substantially lower” amount within the next few weeks. According to the legal insider, there was no guarantee that the issue could be resolved swiftly.
However, once it goes ahead, the fine will be the largest ever amount that is issued by the FCA in terms of cyberattack-related crimes.
In November 2016, the retail banking systems of Tesco experienced an attack from hackers. It suspended all online transactions after it detected criminals trying to access its services. After the incident, the retailer was forced to notify approximately 9,000 of its customers after their information was stolen. It provided a total refund amounting to £2.5 million.
Tesco Bank is believed to have eventually placed the figure at fewer than 50 customers. All of the customers were refunded within days, while no customer information was compromised.
The lender reduced the number of customers whose savings were stolen from the initial estimates of 40,000 and subsequently 20,000.
The amount of the fine that is originally proposed by the FCA will probably send shockwaves through City boardrooms because of the relatively limited extent of the Tesco Bank episode.
An executive said that such a large fine would likely send an “extraordinary” message to the challenger banking sector of the United Kingdom at a time when ministers are desperate to improve the competition across the retail and small business banking industries of Britain.
Both Tesco Bank and the FCA refused to issue a comment on the matter.
The bank has more than 6 million customers in the United Kingdom. In its last financial year, it posted a profit of more than £200 million.