Lloyds Banking Group has paid £139,000 in compensation after a software glitch exposed the personal data of nearly 500,000 customers. The incident, which occurred on 12 March, affected users of the bank's mobile apps for Lloyds, Halifax and Bank of Scotland.
According to a letter from Lloyds published by the Treasury select committee, the glitch was caused by a software defect introduced during an IT update. Up to 447,936 customers were potentially able to view private information of other users, with 114,182 people clicking into transactions that revealed account details, national insurance numbers or payment references.
Lloyds reported itself to the Financial Conduct Authority on the day of the glitch and notified the Information Commissioner's Office within 72 hours. The bank said there was no evidence of misuse or malicious activity, but it is monitoring for potential fraud.
Compensation of £139,000 has been paid to 3,625 customers for distress and inconvenience, though no financial losses have been reported. The bank is asking customers who may have recorded or shared information to delete it.
The incident has raised questions about customer protections as banks push more users into digital banking. Meg Hillier, chair of the Treasury committee, noted the trade-off between convenience and reliance on technology that can suffer unpredictable errors.
Lloyds will provide further updates to the committee in April and September.
