Tuesday, 2 February 2016

TalkTalk's Cyber Attack Costs Rise To £60 Million #moneytalks


News out this morning suggests that new figures show TalkTalk's breach suffered costs of £60m.
The attack proved to be less successful than first believed with about 4% of the company's 4 million customers affected and no financial loss incurred by customers despite partial disclosure of payment details.
But customers were left fuming by the company's handling of the attack in it's early stage and its seemingly slack security systems. TalkTalk refused to let people terminate contracts without incurring charges and instead offered them a free upgrade, which almost half a million customers took up.
TalkTalk added fewer customers than expected following the attack because it closed down online sales operations and the cost of the disruption in the third quarter was about £15m, it said in a trading statement. There were also exceptional costs of £40m-£45m, taking the total bill for the cyberattack to £60m.
Dido Harding, TalkTalk’s chief executive, said: “It is encouraging to see the business returning to normal after a challenging quarter that was dominated by the cyberattack. 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.”
The company said earnings before interest, tax and other items for the year ending in March would be £255-£265m and that the dividend would increase by 15%. Before the trading update, analysts’ average forecast was for earnings of £264m.
The company’s shares rose 7% to 233p.

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