Tesco Bank has been fined a record penalty of more than £30 million over a cyberattack back in 2016.
The fine, which has been imposed by the Financial Conduct Authority (FCA), was a result of an incident dating back to November of 2016.
As a result of the cyber attack, Tesco’s banking division said at the time that £2.5 million had been stolen from 9,000 customers.
The decision comes amid recent research which indicated that UK bank customers have lost a total of £500 million in the first half of 2018 as a result of such scams, according to trade body, UK finance.
Specifically, £145 million was lost due to authorised push payment (APP) related scams, where customers were conned into making payments to different accounts.
Moreover, £358 million was also lost from unauthorised fraud from third parties, UK finance said.
Whilst banks will refund customers who have been victims of fraud, there are limited protections in place to protect those affected by APP schemes.
UK finance said that only £30.9 million of the £145 million lost through APP scams this year had been returned to victims.
Katy Worobec, managing director of economic crime at UK Finance, warned that the figures revealed that cyber crime continues to be a significant threat.
“The criminals behind it target their victims indiscriminately and the proceeds go on to fund terrorism, people smuggling and drug trafficking, whether or not the individual is refunded,” she commented.
Tesco’s banking arm is still in negotiations with the FCA regarding the penalty, indicating that a lower figure could be agreed upon in the coming weeks.
Nevertheless, the record fine will no doubt be a warning signal to larger banks, as the FCA continues to crackdown on cyberattacks in the banking industry.
Shares in Tesco (LON:TSCO) are currently trading +0.38 percent as of 11.05AM (GMT).