By Mark Young and Tom Jackson

On February 20, 2015, the Information Commissioner’s Office (“ICO”) fined Staysure.co.uk Ltd (“Staysure”), an online travel insurer, £175,000 for failing to protect its customers’ personal data.  In addition to technical vulnerabilities, the ICO took into account Staysure’s lack of security policies and practices when levying the fine.

In short, Staysure had failed to implement processes to ensure that key software updates were applied, leading to vulnerabilities in the company’s IT systems.  As a result, hackers gained access to customers’ personal details, medical data, and payment card information, including over 100,000 sets of credit card details relating to more than 90,000 individual customers.  These stolen details were then used in relation to more than 5,000 fraudulent transactions.

In its monetary penalty notice, the ICO set out a number of aggravating – and mitigating – factors that it considered when imposing the fine:

  • as aggravating factors, it took into account the evidence that personal data was used for fraudulent transactions, and the fact that Staysure should have been aware of its software vulnerability as far back as 2010;
  • as mitigating factors, the ICO highlighted that Staysure was the victim of a criminal attack, was in the process of upgrading its IT systems at the time of the breach, that it voluntarily reported the breach and remained cooperative with the ICO’s investigation, and that it notified affected consumers and took remedial action to remove payment card data from its systems.

It is interesting, as a practical compliance matter, that the ICO criticised Staysure failing to have adequate security policies and systems in place (i.e., for checking, reviewing and applying available software security updates), and took this into account when levying the fine.  This is becoming a standard consideration of the ICO.  For example, Sony was criticised that it should have been aware of its software vulnerability when it was fined £250,000 — the largest penalty levied by the ICO against a private body in connection with a data breach to date (see notice here).  The Staymore case – and the ICO’s increasing focus on private sector companies more generally –  should serve as a warning to companies to put adequate policies and procedures in place to check systems and keep them up to date to help prevent unauthorized disclosure of personal data.

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Photo of Mark Young Mark Young

Mark Young advises clients on data protection, cybersecurity and other tech regulatory matters. He has particular expertise in product counselling, GDPR regulatory investigations, and legislative advocacy. Mr. Young leads on EU cybersecurity regulatory matters, and helps to oversee our internet enforcement team.

He…

Mark Young advises clients on data protection, cybersecurity and other tech regulatory matters. He has particular expertise in product counselling, GDPR regulatory investigations, and legislative advocacy. Mr. Young leads on EU cybersecurity regulatory matters, and helps to oversee our internet enforcement team.

He has been recognized in Chambers UK as “a trusted adviser – practical, results-oriented and an expert in the field.” Recent editions note that he is “deeply knowledgeable in the area of privacy and data protection,” “fast, thorough and responsive,” and has “great insight into the regulators.”

Mr. Young has over 15 years of experience advising global companies, particularly in the technology, health and pharmaceutical sectors, on all aspects of data protection and security. This includes providing practical guidance on analyzing and using personal data, transferring personal data across borders, and potential liability exposure. He specializes in advising in relation to new products and services, and providing strategic advice and advocacy on a range of EU law reform issues and references to the EU Court of Justice.

For cybersecurity matters, he counsels clients on practices to protect business-critical information and comply with national and sector-specific regulation, and on preparing for and responding to cyber-based attacks and internal threats to their networks and information. He has helped a range of organizations respond to cyber and data security incidents – including external data breaches and insider theft of trade secrets – through the stages of initial detection, containment, notification, recovery and remediation.

In the IP enforcement space, Mr. Young represents right owners in the sport, media, publishing, fashion and luxury goods industries, and helps coordinate a team of internet investigators that has nearly two decades of experience conducting global notice and takedown programs to combat internet piracy.