TalkTalk investors breathed a sigh of relief this morning, after the telecoms company announced the cyber attack had affected just 4% of its customers. While the reputational damage will ripple on for some time yet, at least the direct costs won’t be as bad as many were imagining.
It confirmed that almost 157,000 of its 4 million customers had their personal details accessed by the hackers on October 21, far less than the 1.2 million it initially thought could have been affected. Of these, 15,656 had their bank account numbers and sort codes taken.
But, thankfully for both TalkTalk and its customers, that information can’t by itself allow cyber criminals to steal anything. Although 28,000 credit and debit card numbers were also accessed, they were ‘orphaned’, such that customers can’t be identified.
Not surprising, then, that the markets did a rapid downgrade of the amount they think TalkTalk will have to pay out to clean up the mess. The FTSE 250 company’s shares were up more than 4% to 230p this morning, having lost more than a quarter of their value since the cyber attack was made public.
Nonetheless, the reputational fallout from the attack, over which four people, three of them teenagers, have been arrested and bailed, will continue for some time yet. Firstly, there’s the drip of stories about scammers using the stolen data to trick customers – usually outraged pensioners - into giving out the rest of their financial information, despite TalkTalk saying time and time again that it wouldn’t ever ask for such details over the phone.
Then there’s the fact this whole debacle is serving as a reminder to the general populace of how much they hate telcos – the dire customer service, the sneaky fee rises. TalkTalk is merely the punchbag du jour, while BT, Sky, Virgin et al get a reprieve from popular disdain (and are not doubt feeling pretty smug about it).
TalkTalk is standing firm on not waiving contract break fees – fair enough given the inevitable customer exodus that would ensue if it did. It’ll be a while yet before we get an idea of whether the scandal has stemmed the influx of new customers, though – it releases results next week, but only for the six months to September 30.
