A software defect at Lloyds Banking Group exposed the personal data of up to 447,936 customers after an IT glitch allowed users to see other customers’ transactions and account information.
The incident, which occurred on 12 March during an overnight system update, affected customers using mobile banking apps across Lloyds, Halifax and Bank of Scotland.
The error meant that some users could briefly view transactions belonging to others, including account details, payment references and national insurance numbers.
Around 114,182 customers clicked on transactions that displayed other users’ personal information. The bank said customers would have had to access their apps within fractions of a second of other users for the data to appear.
Cause of the Incident and Compensation
Lloyds attributed the breach to a software defect introduced during a routine IT update. The bank said it reported the incident to the UK’s Financial Conduct Authority on the morning of 12 March and notified the Information Commissioner’s Office within the required 72-hour period.
The bank also warned that some exposed transaction details may have involved people who were not Lloyds customers, such as individuals receiving payments from Lloyds account holders.
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Lloyds has paid £139,000 ($183,000) in compensation to 3625 customers for the distress and inconvenience caused by the incident. The bank said there was no evidence of financial loss or fraud linked to the glitch, but monitoring would continue.
However, the incident has raised concerns about the reliability of digital banking systems as banks continue closing physical branches and moving services online. UK bank branch numbers have fallen significantly over the past decade, increasing reliance on mobile and online banking platforms.
Officials said the incident highlighted the trade-off between convenience and technological risk in modern banking, with regulators continuing to monitor the situation and requesting further updates from Lloyds in the coming months.
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