Source: MacRoberts LLP
As featured in Scottish Construction Now
Earlier this month, the construction company known as Construction Materials Online Limited (CMO) was fined £55,000 by the Information Commissioner’s Office (ICO) for breaching the laws on data protection and information security.
So what happened?
CMO operated a website which enabled customers to buy building materials online. CMO’s website was created by a third party website developer, and unknown to CMO, the website’s log-in pages contained a coding error.
This coding error created a vulnerability which allowed a hacker to modify payment pages and access the personal banking details of over 600 customers, including the names, addresses, bank account numbers and sort codes of customers.
What did the ICO say?
The ICO (the data protection regulator in the UK) found that CMO, as the data controller, failed to take appropriate and technical measures against unauthorised or unlawful processing of personal data as is required by principle 7 of the Data Protection Act 1998 (DPA).
In particular, the ICO found that CMO failed to:
- carry out regular penetration testing of the website which would have detected the coding error; and
- ensure that the passwords on the website were sufficiently complex to resist a brute-force attack on the stored hash values (hashing is like a form of encryption whereby a password is turned into a scrambled representation of itself).
What is principle 7?
Principle 7 requires organisations to take appropriate technical and organisational measures against unauthorised or unlawful processing of personal data and against accidental loss or destruction of, or damage to, personal data. According to the ICO’s guidance, in practice, this principle means that organisations must:
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