Over one-quarter of Tesco’s UK bank accounts were hacked over the weekend. Worse still, almost one in seven accounts had money stolen from them.
Tesco Bank has 136,000 current accounts in the UK, 40,000 of which were hacked over the weekend. 20,000 hacked accounts suffered a withdrawal of funds. As a result, Tesco Bank is under fire.
All of its customers were blocked from making any online transactions today (7 November) following the hack, the first ever to see a British bank’s customers lose money.
Customers could still use their bank cards in shops and withdraw cash from ATMs, showing just how exclusive digital bank theft has become.
All customers affected will be reimbursed, with Tesco Bank CEO, Benny Higgins, assuring that all losses through this fraudulent activity “will be borne by the bank”.
“We think it would be relatively small amounts that have come out but we’re still working on that,” he said earlier today, claiming the cost of the reimbursement would be “a big number but not a huge number” for Tesco.
A spokesperson for the Information Commissioner’s Office said: “We’re aware of this incident and are looking into the details.
“The law requires organisations to have appropriate measures in place to keep people’s personal data secure. Where there’s a suggestion that hasn’t happened, the ICO can investigate, and enforce if necessary.”
Tesco’s a small player in Britain’s banking industry, though given the flux in this area, the benefits for a major retailer getting involved are obvious. Traditional financial institutions are seeing their stranglehold over the industry loosen every day.
“Think about technology and financial licenses in the ‘wrong’ hands, like a telecoms provider or retailer which has millions of customers,” said Matthias Kröner, CEO of the entirely online Fidor bank.
“That, in my eyes, is the perfect storm for established banks – with competitors driven by a cool brand and a digital banking infrastructure.”
However, incidents like this show just how hard it is for new banks to gain the trust required by customers.
“The good news is 86pc of customers believe they trust their banks more than they trust others,” said Mairead Jackson, MD at Accenture.
Hacks like Tesco’s will only underline this further.