Dixons Carphone has been issued the maximum possible fine amount under the pre-GDPR data protection regulation after the tills in its stores were compromised by a cyberattack back in 2017 that affected 14 million customers.
The retailer discovered the breach last summer and an investigation into the incident by the Information Commissioner's Office (ICO) found that an attacker had installed POS malware on over 5,390 tills in the retailers' Currys PC World and Dixons Travel storefronts.
The malicious software went unnoticed for nearly nine months, between July 2017 and April 2018, and allowed hackers to harvest sensitive data from customers, including names, postcodes, email addresses, and failed credit checks from internal servers, leaving customers particularly vulnerable to identity fraud and financial theft. The attacker was also able to harvest the payment card details of 5.6 million customers.
Steve Eckersley, Director of Investigations for the ICO, claims that the ICO found "systemic failures" in the way Dixons Carphone looked after customer data. The ICO said Dixon's poor security arrangements and inadequate steps taken to protect data had breached the Data Protection Act 1998. The "poor security arrangement" mentioned by the ICO includes ineffective software patching (See CIS Control 2: Inventory and Control of Software Assets), no local firewall, and lack of network segregation and routine security testing.
These security deficiencies were so serious that the ICO was left with no choice but to fine the UK retailer the maximum possible fine of £500,000, but Eckersley claims that the fine would inevitably have been much higher under the new GDPR data protection regime. Under the GDPR, the ICO can now fine a company up to 4% of their annual global turnover. In fact, just last summer British Airways was fined £183 million and the Marriot Group was fined close to £100 million under the new GDPR regulation as a result of data breaches that hit the organizations in 2018.
Carphone Warehouse, a part of the same group, was also fined £400,000 by the ICO last year for similar security vulnerabilities.
To avoid hefty penalties with GDPR, NNT recommends regularly patching to minimize risk and eliminate security vulnerabilities, ensure that the proper access controls are in place (see CIS Control 14: Controlled Access Based on the Need to Know), only collect and store information that's absolutely necessary, and restrict access to only the employees who need that information to complete their job.