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Analysis

TalkTalk hack: should the company have encrypted customer data?

TalkTalk's CEO has said the company didn't encrypt all its customer data because it wasn't obliged to. Is she right?

Locks on a screen with one open and in red

One of the most significant questions to have arisen from the hack suffered by TalkTalkis why customers' data stored in the company's databases wasn't encrypted.

It may seem like hubris to many that Dido Harding, TalkTalk's CEO, told The Sunday Times sensitive personally identifiableinformation, including bank account numbers, sort codes and full names, were stored unencrypted because there is no legal obligation to do so.

"We have complied with all our legal obligations in terms of storing of financial information," she claimed.

But is she right - did TalkTalk fulfil its legal obligations even though it didn't encrypt this data?

The answer is, yes and no.

A spokesperson for the Information Commissioner's Office (ICO) toldIT Pro: "All organisations must have appropriate security measures in place to prevent the personal data they hold being accidentally or deliberately compromised. Any measures put in place should prevent security breaches or limit the damage if they do occur.

"As one single product cannot guarantee security, we would advise a combination of different tools and techniques. Encryption is just one way of doing this."

However, Mahisha Rupan a senior associate at law firm Kemp Little toldIT Pro: "If TalkTalk was not encrypting its customers' data, which is a fairly standard security technique, TalkTalk will need to show that it utilised other technology to secure and protect the data in a way that would otherwise fulfil its legal obligations."

The matter is now in the hands of the ICO, which will determine if TalkTalk did indeed comply with its legal obligations even though it didn't use encryption, and if the company is found to have failed in its duties, the ICO is able to fine the telco up to 500,000.

Affected customers also have recourse to independent legal action, should they wish.

"As an alternative to enforcement through the Information Commissioner's Office, customers may apply to directly to the courts to enforce their rights under the Data Protection Act 1998 in certain circumstances. Compensation to individuals can only be awarded by the courts and not by the Information Commissioner's Officer," explained Rupan.

However, she cautioned that "So far, very few claims for compensation have been made by individuals and, where they have, the awards have been low."

If you are worried you have been affected by the TalkTalk hack, get advice on what to do next here.

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