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Small Business Fined £5000 for Lost Hard Drive

Published on 12 October 2013
When scandals about data protection reach the news, it’s usually huge corporate companies in the firing line. Sony was recently at the forefront of a data protection scandal when millions of Playstation Online users’ personal details were lost when the system was hacked, and this is just one example of many.
Small business owners might have thought their accidental misdemeanours simply fell under the radar, especially considering the amount of media scandal surrounding the likes of Sony’s data disaster, but a sole trader in Wembley had to learn the hard way that this just isn’t the case.
A Wembley-based loans company, Jala Transport Ltd, lost a hard drive containing the personal and financial details of 250 customers, including addresses, details of payments made and identification documents used to support loan applications. The hard drive, along with £3600 in cash, was stolen from the business owner’s car whilst it stopped at a set of traffic lights in London back in August 2012.
The small company was recently fined £5000 for the incident. The fine should have actually been a shocking £70,000, but the amount had to be reduced considering the business’s limited financial resources. Thankfully for Jala Transport, it was taken into consideration that the breach was reported voluntarily, and that was a factor that contributed to the fine being lowered. Nevertheless, the fine will no doubt be debilitating for the small, Wembley-based company.
The hard drive containing the data was password protected, but not encrypted, meaning the company’s customers were left vulnerable to identity theft and fraud.
All businesses, no matter whether they’re big or small, should always encrypt any data stored on an electronic device if they want to avoid seriously breaching the Data Protection Act. Encryption uses a set of complex algorithms to hide the underlying data present on the device, consequently protecting the information.
Similarly, when the information is no longer needed, the device storing the information should be taken to a specialist to be destroyed in accordance with government legislation. If any company fails to do so, they are leaving their customers vulnerable to identity theft and themselves vulnerable to an undoubtedly debilitating £70,000 fine.
This case is a prime example that the penalties enforced by the ICO are not to be taken lightly, so just think, next time your business is storing confidential customer data, could you afford a £70,000 fine?

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