TalkTalk loses 101,000 customers following data breach

February 2, 2016 | 11:39

Tags: #baroness-harding #data-breach #dido-harding #encryption #insecurity #isp #security #service-provider

Companies: #talktalk

Insecure internet service provider TalkTalk has revealed the final impact of last year's electronic attack which exposed shocking security practices at the firm: the loss of more than 100,000 customers.

TalkTalk hit the headlines for all the wrong reasons last year when the company was hit by what it called 'a significant and sustained cyber attack' resulting in the theft of personal and payment details of more than four million customers. As suspects were arrested, more of the story came out: the company did not encrypt any customer details whatsoever, with TalkTalk head Baroness Harding arguing that 'nor are [we] legally required to encrypt it' - ignoring the section of the Data Protection Act which requires 'appropriate technical or organisational measures be taken' to protect customer data from exactly the kind of breach suffered by the company.

In November, the company argued that the breach was not as serious as had been made out in the media but would cost the company between £30 million and £35 million covering incident response, increased call volumes, IT and technology costs, and a three-week shutdown in online sales.

Now, in the company's latest earnings report, the impact of the breach can be clearly seen in the news that 101,000 of the company's customers abandoned ship in the aftermath. Direct costs following the incident were also higher than expected, and are expected to finish at around £40 million to £45 million with the inclusion of giving customers free upgrades to higher-grade packages as an incentive to stay. Despite both of these facts, the company experienced growth: its final dividend is expected to be 15 per cent higher year-on-year.

'It is encouraging to see the business returning to normal after a challenging quarter that was dominated by the cyber attack. Our customers have responded well, with almost half a million customers choosing to take up our unconditional offer of a free upgrade,' boasted Baroness Harding. 'Both churn and new connections recovered during December and January and independent external research has revealed that customers believe that we acted in their best interest. In fact trust in the TalkTalk brand has improved since just after the attack and consideration is higher now than it was before the incident.'
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