Brokers fined $700,000

FSA says customer data 'could have ended up in criminal hands'

HSBC Insurance Brokers has been fined £700,000 for failing to protect confidential customer information.

The FSA, which also also fined HSBC Life £1.6m and HSBC Actuaries £875,000, said the group lost customer data in the post on two occasions because of sloppy controls.

During its investigation into the firms’ data security systems and controls, the FSA found that large amounts of unencrypted customer details had been sent via post or courier to third parties.

Confidential information about customers was also left on open shelves or in unlocked cabinets and could have been lost or stolen. In addition, staff were not given sufficient training on how to identify and manage risks like identity theft.

Despite increasing awareness of the need to protect people’s confidential details, all three firms failed to put in place adequate procedures to manage their financial crime risks.

Margaret Cole, director of enforcement at the FSA, said: “These breaches are very disappointing. All three firms failed their customers by being careless with personal details which could have ended up in the hands of criminals.

“It is also worrying that increasing awareness around the importance of keeping personal information safe and the dangers of fraud did not prompt the firms to do more to protect their customers’ details.”

In April 2007, HSBC Actuaries lost an unencrypted floppy disk in the post, containing the personal information of 1,917 pension scheme members, including addresses, dates of birth and national insurance numbers.

In July 2007, all three firms were warned by HSBC Group Insurance’s compliance team about the need for robust data security controls.

However, in February 2008 HSBC Life lost an unencrypted CD containing the details of 180,000 policy holders in the post.

The confidential information on both disks could have helped criminals to steal customers’ identities and commit financial crime.

Cole said: “Fraud, particularly identity theft, is a major concern to everyone and firms must ensure that their data security systems and controls are constantly reviewed and updated to tackle this growing threat.

“In areas where we have previously warned firms of the need to improve, people can expect to see fines increase to deter others and change behaviour in the industry.”

The firms have taken a number of remedial actions to address the concerns raised, including contacting the customers concerned, improving their staff training and requiring that all electronic data in transit is encrypted.

HSBC Insurance Brokers, HSBC Actuaries and HSBC Life co-operated fully with the FSA in the course of its investigation.

All three firms agreed to settle at the early stage of the FSA’s investigation and qualified for a 30% discount. Without the discount, the fines would have been £1m for HSBC Insurance Brokers, £1.25m for HSBC Actuaries and £2.3m for HSBC Life.

Insurancetimes UK

No Jail To British Grads

The two British law graduates facing trial in Brazil for charges of fraudulent insurance claims will not have to return to prison, a lawyer claimed today.

Renato Tonini said he was confident that even if Shanti Andrews and Rebecca Turner were convicted, they would be able to serve their punishment without being sent to jail.

Miss Andrews and Miss Turner, both 23, were freed on bail on Saturday and were today staying in a hotel ahead of a court appearance in Rio de Janeiro on Wednesday.

Mr Tonini said the women, both University of Sussex law graduates on a nine-month journey around the world, will have the charge of attempted insurance fraud read to them in English during the hearing.

Speaking from Rio de Janeiro, Mr Tonini said: 'I'm very confident that they will not be going back to prison. Even if they are convicted, I think a fine would solve the problem.

'The next step is the court appearance on Wednesday, where someone will read the charge to them in English.'

Mr Tonini said he hoped a judgment would be made on the merit of the charge in up to four weeks' time.

In the meantime, the lawyer said the women had voluntarily surrendered their passports to the Brazilian authorities to show they have no intention of fleeing.

The pair are alleged to have told police in the South American country that belongings totalling £1,000 had been stolen during a bus journey.

The pair were taken into custody at dawn last Monday after officers from a specialist tourist support unit apparently became suspicious that they had waited several days before reporting to police.

The website of Rio de Janeiro state's civil police said the pair had tried to register a robbery, alleging they had been attacked.

A subsequent search of their lodgings in Copacabana allegedly uncovered some of the belongings that they had originally told officers had been stolen.

After being freed from custody on Saturday, the women spoke of their ordeal, surrounded by drug traffickers, robbers and murderers before being moved to a second jail they described as entering 'the gates of hell'.

Describing the first jail, Miss Turner told the Mail on Sunday yesterday: 'It was a living nightmare. It was the most terrifying thing that ever happened to me in my life.

'They only spoke Portuguese and we only spoke English and there were moments when we wondered if we would ever get out of there.

'The centre had no cells, just five or six open rooms, each measuring about 12ft by 10ft and 25 women crammed into each.

'It was so cramped we slept in the corridor but it was still so tight that at night you had to lie on your side. Everyone slept on the concrete floor. They just gave us a thin blanket each.'

Miss Andrews' father Alan is said to have used part of his life savings to travel to Brazil to help gain their freedom.

Miss Andrews' mother, Simone Headley, who lives in Frant, near Tunbridge Wells, Kent, told earlier this week how the two friends were traumatised by their ordeal and that it had been a 'misunderstanding'.

Daily Mail

Insurance Fraud

The number of people making fraudulent insurance claims is on the rise. However the major problem with this is that it pushes up the cost of insurance for everyone else.

"The medical profession is traditionally held in high regard but it too contains its sinners. A very exact picture has emerged from fraud-busters in South Africa, indicating that six per cent of bills submitted by doctors or hospitals for payment by insurance companies are wholly unjustified.

The figure was produced by Patrick Lubbe, financial director of Medical Services Organisation in Johannesburg. The risk-management company handles claims from 1.1 million people holding medical cover with 28 insurers and mutual benefit companies.

Mr Lubbe's staff of 180 – mainly former nurses – handle 60,000 medical and dental claims a month. From such a large database he is easily able to spot unreasonable claims from more than 6,000 "procedure codes" ranging from scans and blood tests to cyst removal and open-heart surgery.

"You'll be amazed how many dental providers try to pull out the same tooth six times," he says. "We think five to six per cent of admissions are not justified."

One doctor claimed 21 times for inserting grommets to overcome "glue ear" when the operation he had actually carried out was a cosmetic procedure – flattening "stick-out" ears. "He owed us 21 times 35,000 rand, (£2,600)," Mr Lubbe remarks dryly.

In another case, an orthopaedic surgeon attempted to charge three times the accepted rate for a knee operation. Some of the worst abuses involved emergency admissions, some brought in by helicopter. "When a patient lands, [some claimants] see a cheque book in dollars or pounds sterling."

Lifeinsure UK

35 years is enough

ID theft victim of 35 years elated ’ at arrest A man who was the victim of a 35-yearlong identity theft said yesterday he ’s so happy about an arrest in the case he could kiss the special agent who handled it.

Tom Lesh, 66, of Coos Bay, said he ’s known since the 1970s that his brother ’s friend stole his identity, and he appealed to everyone from the IRS to the suspect ’s own mother for help to no avail. As the decades wore on, he said, he spent "thousands of hours" writing letters to credit card companies, banks, insurance companies and government agencies, trying to clear his name.

"At one point I thought about getting a hit man, but I worried that with my luck, they ’d get the wrong Tom Lesh," he joked.

Finally, this year, insurance fraud investigator Sandy Larson took up the case, when an insurance company had received claims for treatment a Tom Lesh received at a Seattle hospital, but the real Tom Lesh told the company it wasn ’t him.

Larson forwarded the matter to Matt Lavelle, a special agent with the Social Security Administration ’s Office of the Inspector General, who tracked down the suspect, a 58-year-old truck driver whose real name is Clark Mower. and arre~thd him. AP

Wairarapa Times Age