British Mutual Fund Company Hit with $2 Million Fine

Nationwide Building Society, the United Kingdom’s largest mutual fund, has been hit with a fine of close to £1million – or $1.94 million – after a stolen laptop left 11 million of its customers at risk of identity fraud.

According to an article by Philip Aldrick, Banking Correspondent for London’s Guardian newspaper, Britain’s Financial Services Authority (FSA) found Nationwide had inadequate information security procedures and controls in place.

The FSA, which is a “watchdog,” says Aldrick, said Nationwide was unaware that the laptop contained confidential customer information, “potentially exposing customers to an increased risk of financial crime.”

“It also failed to start an investigation until three weeks after the theft,” Aldrick adds. “The £980,000 penalty relates to a burglary at a Nationwide employee’s home in August last year during which a company laptop was stolen.”

Margaret Cole, director of enforcement at the FSA, told Aldrick: “Nationwide is the UK’s largest building society and holds confidential information for over 11 million customers. Nationwide’s customers were entitled to rely upon it to take reasonable steps to make sure their personal information was secure.”