CBA data breach an "extraordinary blunder" PM

CBA data breach an

The statements, containing customers' names, addresses, account numbers and transaction details from 2000 to 2016, were stored on two magnetic tapes which were lost by sub-contractor Fuji-Xerox a year ago.

The loss itself occured in 2016 when a subcontractor (Fuki Xerox) seemingly misplaced the data stored on tape drives.

Although ongoing monitoring may protect from any fraud or theft targeted at CBA accounts, do customers have a right to know when the names, addresses, and detailed finances of 12 million customers are misplaced?

It's understood two magnetic tapes that contained customer statements were scheduled for destruction by the bank when they disappeared in May 2016.

The Commonwealth Bank's acting head of retail, Angus Sullivan, defended the decision not to tell customers in an interview with the ABC's AM program. Others suggest that a person tasked with destroying the tapes might have left them unattended.

CEO of CBA Matt Comyn said all of the APRA recommendations would be implemented:"We will establish a higher level of accountability and outcome for our actions and the impact we have on customers".

As a precaution, the bank said it has been monitoring the 19.8 million accounts involved and had so far found "no evidence of customer harm or suspicious account activity". Sullivan assured the customers of the bank that no personal data had been compromised and so no action is required from their side, including changing passwords or PIN numbers.

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The latest revelation is another blow to the Commonwealth Bank, which is already reeling from several other scandals.

The mandatory data breach notification laws came into effect in February this year and can result in businesses being fined up to $2.1 million for failing to disclose serious data breaches to affected customers and the Office of the Australian Information Commissioner (OAIC). There have been numerous reports of counterfeit credit cards and identities from CBA-owned BankWest available for sale on the dark web, and staff members were sacked from the WA bank in 2014 for selling documents.

National Australia Bank chief executive Andrew Thorburn said the bank would likely be reviewing its own data processes after CBA's mass breach. As a result, it decided against notifying customers and stepped up its monitoring of impacted accounts.

While there may be truth to this, recent legislation means that Australian businesses must report if they've suffered a data breach to both the regulators and the affected individuals if they were deemed at risk.

Commenting on the incident, the Australian Prudential Regulation Authority said that community trust in CBA had been "badly eroded" and the bank had "fallen from grace".

Commonwealth also hired KPMG to conduct an independent investigation.

"The 2016 incident was not cyber-related and there has been no compromise of CBA's technology platforms, systems, services, apps or websites".

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