Barclays' Busted For Stealing, Selling Confidential Financial Data Of Thousands Of Clients

Tyler Durden's picture




 

In recent months, the attention of the public has been consumed by concerns over private data abuse by such public spy agencies as the NSA, as well as what personal financial information may have been intercepted by rogue hacker black hats who in the past two months have been blamed for millions in credit card privacy breaches. However, so far there have been two major loose ends in the story of personal data collection (and abuse): just how web search browsers and cookie-based advertising companies collect everything there is to know about the particular interests and desires of any given individual, and just as importantly, how banks abuse client confidentiality by taking the secret financial data of their clients less than seriously.

Today, one of these loose ends got some much needed public exposure after the Daily Mail, of all places, reported that it had been approached by a whistleblower, who revealed that in one of the biggest breaches of bank secrecy, Barclays had stolen and sold the confidential personal and financial data of up to 27,000 clients to the highest market bidder, in most cases rogue traders who had seen Glengarry Glen Ross one too many times, and who would then use Jordan Belfort-inspired tactics to sell money losing investment products to those unlucky thousands who had entrusted their data to the bank.

Is this the case of yet another "Snowden" growing a conscience and exposing the fraud he had witnessed for all to see? For the time being, it sure looks like it:  "This is the worst [leak] I’ve come across by far,’ said the  former commodity broker and whistleblower. ‘"But this illegal trade is going on all the time in the City. I want to go public to stop it getting bigger."

From the Mail:

Barclays Bank is reeling from an unprecedented security breach after thousands of confidential customer files were stolen and sold on to rogue City traders.

 

In the worst case of data loss from a British High Street bank, highly sensitive information, including customers’ earnings, savings, mortgages, health issues and insurance policies, ended up in the hands of unscrupulous brokers. The data ‘gold mine’ - also containing passport and national insurance numbers - is worth millions on the black market because it allowed unsuspecting individuals to be targeted in investment scams.

 

Barclays last night launched an urgent investigation and promised to co-operate with police.

 

It is not clear how the records were stolen, but the bank could face an unlimited fine if found guilty of putting customers’ details at risk. 

 

The leak was exposed by an anonymous whistleblower who passed The Mail on Sunday a memory stick containing files on 2,000 of the bank’s customers.

 

He claimed it was a sample from a stolen database of up to 27,000 files, which he said could be sold by shady salesmen for up to £50 per file.

Of course, Barclays has had its share of legal troubles in recent years, having been exposed as the first bank in the still growing Libor-rigging scandal for which is was fined GBP290 million, and now this data loss, which is a breach of its obligations under the Data Protection Act to keep personal information secure, will almost certainly cost its many more hundreds of millions in legal fees and damages.

The sources of the breached and stolen files was data collected from customers who had sought financial advice from the bank, and passed on their details during meetings with an adviser. The consultations included filling out questionnaires - or ‘psychometric tests’ - which revealed their attitude to risk. That information could be exploited to persuade victims to buy into questionable investments.

One could call them, the "Glengarry leads", and an example of one is shown below:

But while Barclays collecting detailed data about its clients is perfectly normal, what it did next is criminal:

The whistleblower first became aware of the Barclays leads in September when the boss of the brokerage firm asked him to sell them to other traders. ‘The obvious question I asked was, “These are fantastic leads, why are you not using them yourself?”

 

‘He replied, “We have – sell it as secondary data.” He had got all he could out of them. New, they were worth £50 per file. He asked us to sell for £8.’

 

The whistleblower showed the leads to a select group of brokers ‘who thought they were amazing’, but eventually decided not to sell.

 

‘My conscience got the better of me. It was all just so wrong,’ he said. ‘I wasn’t a broker myself at this stage, but I had a business link to the firm.’

 

Between December 2012 and September 2013 the firm persuaded victims to buy rare earth metals that did not exist, it is claimed. The whistleblower estimates up to 1,000 people could have been ‘scammed’.

Then the party was over as quickly as it started:

When the investors began to suspect they were being fleeced he said the boss chose to ‘shut the trading floor’.

 

His orders were to get rid of the evidence, to show that we were never there. We bleached the desks so his DNA was not in the office. We destroyed his laptop and 15 bags of paperwork. We wiped the computers. During this fiasco he asked me, “Have you got the Barclays leads?” I said, “No, I haven’t, they must have been destroyed”. ‘But I kept them because I thought the whole thing had gone too far. I want to stop it now, to tell people what was happening.’

Alas, the burning down of the crime scene was not enough, and now that Barclays has been exposed, the damage control begins:

Barclays said in a statement: ‘We are grateful to The Mail on Sunday for bringing this to our attention and we contacted the Information Commissioner and other regulators on Friday as soon as we were made aware. 'Our initial investigations suggest this is isolated to customers linked to our Barclays Financial Planning business, which we ceased  in 2011.

 

‘We will take all necessary steps to contact and advise those customers as soon as possible so that they can also ensure the safety of their personal data. ‘Protecting customers’ data is a top priority and we take this issue extremely seriously. This appears to be criminal action and we will co-operate with the authorities on pursuing the perpetrator.

 

'We would like to reassure all of our customers  that we have taken every practical measure to ensure that personal and financial details remain as safe and secure as possible.’ The Mail on Sunday has arranged to pass on the data to the Information Commissioner’s Office. A spokesman said: ‘We’ll be working with The Mail on Sunday this week as well as working with the police.’

That's not all: we also learn that the legacy of the Wolf of Wall Street is alive and well. So alive in fact, he has been in ongoing consultations on how to cold call clients about which the sellers already knew everything in advance:

Brokerages want to hire people who are money-oriented, articulate and who speak the Queen’s English. Their ideal is the young, hungry white guy. They want the most aggressive person, very manipulative and bullish, almost like a New York broker in the 1980s.

In the first interview they would ask: ‘Do you **** whores and sniff coke? Do not come and work here if you don’t.’ They might even ask the interviewee to sing a song. They want to see if they can bend them over a barrel and get them to do what they want. Out of 10,000 brokers, 9,000 will be earning below the minimum wage. The majority will never succeed. The successful ones do not have a moral compass.

 

Most people drop out after a couple of years because they burn out but I know old school brokers who’ve done it since the 1980s. 

 

We got trained by Jordan Belfort, the real-life Wolf of Wall Street. It cost £38,000 for an hour’s conference call with him from New York. Three different firms took part and there were 40 brokers in the room, sitting around a phone.

 

He’s big on ‘rapport building’. He shows how to apply pressure in the right places - how to manipulate people in a controlled way. In all cases, brokers try to find the person’s motive for investing. When trust is established  it’s very easy to make the ale or ‘load’ a client with a commodity. Loaders are a breed of broker and some can earn 40 per cent a deal on just the commission.

...

A lot of contracts between broker and investor include ‘exit confirmation’ - the date when the return on investment is expected. But in many cases those clauses are a lie. A month or two before the exit strategy is due, the firm winds up and disappears.

 

The owners - criminals in sharp suits - will set up shop, trade for a bit, then the company will close, only for the brokers to open another one.

 

The next day they ring the same clients, but with different voices on the end of the phone. You might use a different name - nobody uses their real name. Many on the Barclays list were born in the 1930s. Old people are perfect targets because they are more trusting and they haven’t got long left. You hope they die before your exit strategy comes up.

Hopefully this anecdote serves to illustrate the link between insolvent (but bailed out) and cash-strapped banks, boiler rooms, and criminal salespeople.

Finally, it goes without saying, that if this is happening in the UK it most certainly taking place in the US as well. And as a follow up - while the general public has every right to be concerned about how its private data is being abused by public spy entities such as the NSA, perhaps it is time to inquire just how it may be abused not only by private banks such as Barclays, but by all those private corporations who interact daily with the countless users who share their data on the Internet assuming that it won't be used in a criminal fashion by virtually everyone.

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Sun, 02/09/2014 - 13:24 | 4417297 LawsofPhysics
LawsofPhysics's picture

Unless Barclay's goes bankrupt, this behavior will continue...

Same as it ever was.

Sun, 02/09/2014 - 13:29 | 4417314 TheFourthStooge-ing
TheFourthStooge-ing's picture

Barclay's: "But, but, but Google does it all the time!"

Sun, 02/09/2014 - 13:44 | 4417337 macholatte
macholatte's picture

 

 

Corporation: An ingenious device for obtaining profit without individual responsibility.

Ambrose Bierce

 

Now nobody get nervous, you ain't got nothing to fear. You're being robbed by the John Dillinger Gang, that's the best there is!

John Dillinger

 

We're not children here. The law is-how should I put it? A convenience. Or a convenience for some people, and an inconvenience for other people.

Paul Castellano

 

This American system of ours, call it Americanism, call it capitalism, call it what you will, gives each and every one of us a great opportunity if we only seize it with both hands and make the most of it.

Al Capone

 

Sun, 02/09/2014 - 13:55 | 4417362 James_Cole
James_Cole's picture

Know your Barclays, most interconnected company in the world:

http://www.newscientist.com/article/mg21228354.500-revealed--the-capital...

Sun, 02/09/2014 - 14:27 | 4417410 knukles
knukles's picture

Barclays to BoE:  Now with this bad news of client abuse, we'll loose money and require another bailout
BoE:  OK, just let us know how much and when.
Barclays:  Will do, thanks, mate!
BoE:  No problem.  Say, about those Libor, dollar, cable, silver and gold levels we spoke about.  You're keeping your eye on em', right?
Barclays:  Exactly as you approved.
BoE:  Lunch?
Barclays:  Sure, my treat.

And so as it was in the beginning is now and forever...

Sun, 02/09/2014 - 14:32 | 4417428 NoDebt
NoDebt's picture

When lying has no consequences, all other crimes become within easy reach.

Sun, 02/09/2014 - 14:42 | 4417460 Pure Evil
Pure Evil's picture

This same behavior goes on down here in Florida, except instead of brokers trying to screw old people out of their money its a bunch of questionable heating and air conditioning companies.

Since there's a shiitload of senior citizens in this area they call either pretending that they talked to you six months ago about coming out to work on your A/C unit, or they relentlessly pursue you daily until you capitulate.

I had one with the gall to stop by insisting that we had ordered a service rep to come out and fix out unit.

And as the article stated, they would call one day with one person and a company's name and the next call with someone else about a different company.

They must have had a limited number of people making calls cause after about a week it circled around back to a person's voice I had heard a few times before.

And no amount of cursing and yelling would stop them from calling. You could demand to be taken off their list and the next day someone else would call and you'd have to go through the schtick again.

Sun, 02/09/2014 - 15:40 | 4417623 Colonel Walter ...
Colonel Walter E Kurtz's picture

Just hang up on these "salespeople." You do not have to hang on for the schtick. If they get you talking there is a chance for them to make a sale. They have no guilty feelings about wasting your time trying to sell you a service you do not need, so do not feel bad about being rude by hanging up on them. They'll stop calling if they know there is not a potential mark at the other end of the phone number.

 

Whose got the Glen Gery leads!

Sun, 02/09/2014 - 16:34 | 4417755 11b40
11b40's picture

Much better still.....don't hang up.  Just lay the phone down and let them talk to themselves.

Eventually, they figure out that all you are doing is wasting their time while going on about your own business.  That really does piss them off.  It's especailly nice if you have a radio or TV on in the background for them to listen to.

Sun, 02/09/2014 - 17:11 | 4417824 Pure Evil
Pure Evil's picture

Nah, none of that stops them. They know all the tricks. And they have a manager that pushes them to try again and again. They may give it up for a few days but in another week they're back to calling again with a brand new person.

And why you may ask. Cause they know there's an old fogey with dementia on the other end that might pick up the phone. And they don't make money by giving up.

I had one give me a call and started his spiel and I just hung up on him. He had the gall to call back while acting all innocent and tried to tell me that we must of been disconnected. I told him then and there, that, no, we weren't disconnected, I hung up on you on purpose, and then I hung up on him again. He didn't call back a third time.

They haven't been calling lately and I don't know whether its late in the season or they were turned into the state for harassment. I'm waiting to see if they start up again in the spring when everyone starts needing A/C checks before the heat of summer starts.

Lately I've been getting calls from some Hindu Monkeys telling me about a problem with Microsoft on my computer. I think the next time they call I'll listen to the whole spiel just so that I can hear what the full scam is.

Sun, 02/09/2014 - 17:27 | 4417878 Winston Churchill
Winston Churchill's picture

I just let tem do their whole script and try to close the sale,then I say:

"why are you asking me, I'm just the janitor".

They don't ring back.

Sun, 02/09/2014 - 18:18 | 4418023 logicalman
logicalman's picture

A guy I know usually says 'you must have a wrong number, I don't even own a phone' - usually leads to silence at the other end.

I recently had someone phone trying to sell me a water filter.

Their opening gambit was 'do you know what's in your drinking water?'

I said - Fluoride, mercury, PCBs, pesticide run-off, herbicide run-off, pharmaceuticals, artificial sweeteners......

Click.

I guess they figured I'd be hard to scam.

Sun, 02/09/2014 - 20:07 | 4418363 philipat
philipat's picture

"This call is being recorded" usually works.

Mon, 02/10/2014 - 00:17 | 4418927 Dave Thomas
Dave Thomas's picture

Take a few cue's from ol Jim Florentine!

 

http://www.youtube.com/watch?v=8wI1DfBAOvo

Sun, 02/09/2014 - 17:04 | 4417837 SoilMyselfRotten
SoilMyselfRotten's picture

Barclays will surely pay the price for this behaviour. A strongly worded op-ed should put them on the straight and narrow.

Sun, 02/09/2014 - 18:33 | 4418063 NoDebt
NoDebt's picture

Here, here.

Mon, 02/10/2014 - 05:08 | 4419227 jeff montanye
jeff montanye's picture

indeed.  because...cameron.

Sun, 02/09/2014 - 15:44 | 4417629 max2205
max2205's picture

Too big to prosicute? I say not....i say death penalty....

Sun, 02/09/2014 - 23:16 | 4418792 slightlyskeptical
slightlyskeptical's picture

Fuck Aztil Air Conditioning and whoever they changed their name to.

Sun, 02/09/2014 - 14:27 | 4417413 LMAOLORI
LMAOLORI's picture

 

 

Don't know if I should be saying this I know Google is evil and everything but seriously with the NSA it doesn't matter they know everything you do anyway no matter what browser you use.  BUT at least if you do use chrome there are free extensions for DoNotTrack, etc. that leaves the normal business predator's who want to follow you around with cookies out in the cold. You can also disallow Google from tracking you around.

Sun, 02/09/2014 - 16:35 | 4417759 11b40
11b40's picture

My AdBlocPlus tells me there are 19 ads on this page (that I don't see).

Sun, 02/09/2014 - 16:35 | 4417760 11b40
11b40's picture

Dup

Sun, 02/09/2014 - 23:11 | 4418774 0b1knob
0b1knob's picture

The Iron browser and Comodo Dragon are clones of Chrome with most of the spyware cut out.   Change the DNS servers to anything other than Google.   Add some cookie blockers, ad blockers, keyscrambler app, and ZenMate tunneling encrypted network to obfuscate your location.

At least they will have to work to keep track of you.

Sun, 02/09/2014 - 14:48 | 4417480 scrappy
scrappy's picture

Had enough corruption yet?

http://www.nationallibertyalliance.org/

If we build a Grand Jury, the people will come.

Join us.

http://www.nationallibertyalliance.org/what-happend-constitution

 

Sun, 02/09/2014 - 17:22 | 4417866 ArkansasAngie
ArkansasAngie's picture

Goes Bankrupt?  You mean insolvent?   

Hahahahaha

They are ... errrr ... would be if it werent for their TBTF status.

Our financial problem is a political ... law enforcement problem

Sun, 02/09/2014 - 13:23 | 4417301 bigdumbnugly
bigdumbnugly's picture

starting to wonder if we have enough lamp posts

 

Sun, 02/09/2014 - 13:30 | 4417310 Silver_K-9
Silver_K-9's picture

There are enough tall buildings.... #LookOutBelow

Mon, 02/10/2014 - 05:18 | 4419234 jeff montanye
jeff montanye's picture

historical note: On May 16, 1562, Adham Khan, Akbar's general and foster brother, was defenestrated twice for murdering a rival general, Ataga Khan, who had been recently promoted by Akbar. Akbar was woken up in the tumult after the murder. He struck Adham Khan down personally with his fist and immediately ordered his defenestration by royal order. The first time, his legs were broken as a result of the 12 meter fall from the ramparts of Agra Fort but he remained alive. Akbar, in a rare act of cruelty probably excarberated by his anger at the loss of his favorite general, ordered his defenestration a second time, killing him. Adham Khan had wrongly counted on the influence of his mother and Akbar's wet nurse, Maham Anga, to save him as she was almost an unofficial regent in the days of Akbar's youth. Akbar personally informed Maham Anga of her son's death, to which she famously commented, 'You have done well.' She died 40 days later of acute depression.

Sun, 02/09/2014 - 13:30 | 4417316 Retronomicon
Retronomicon's picture

I'd help you put up more if not.

Sun, 02/09/2014 - 14:15 | 4417394 ElvisDog
ElvisDog's picture

Is it wrong that I don't feel sorry for these "investors" who lost all their money? If you're stupid enough to give large amounts of money to a stranger who calls you up on the phone for an investment you know nothing about, then you deserve what you get. Stupid old people should just convert their money into a monthly annuity or donate it all to charity and be done with it.

Sun, 02/09/2014 - 14:34 | 4417434 James_Cole
James_Cole's picture

Is it wrong that I don't feel sorry for these "investors" who lost all their money? 

Yes.

Stupid old people should just convert their money into a monthly annuity or donate it all to charity and be done with it.

Great advice. 

Sun, 02/09/2014 - 14:42 | 4417458 ElvisDog
ElvisDog's picture

My point was if they weren't trapped by this scam, they're going to give all their money to the next one. It's like if you're an alcoholic, you need to remove all alcohol from your house. The monthly annuity takes those terrible investment decisions out of their hands.

Sun, 02/09/2014 - 16:58 | 4417811 New World Chaos
New World Chaos's picture

A monthly annuity is a terrible investment decision.

Sun, 02/09/2014 - 18:35 | 4418068 NoDebt
NoDebt's picture

So they can pay you with the interest on your own money and then keep the principle?  Um, pass.

Mon, 02/10/2014 - 05:25 | 4419238 jeff montanye
Sun, 02/09/2014 - 14:26 | 4417412 knukles
knukles's picture

About that rumor of Goldman buying all the lamppost manufacturers....

Sun, 02/09/2014 - 14:45 | 4417459 jbvtme
jbvtme's picture

the aztecs would flay the fresh pricks and the priest would wear their skin.  you guessed it there were no bankers in mexico in those days

Sun, 02/09/2014 - 15:44 | 4417636 resurger
resurger's picture

No problem!

3 nooses/lamp post.

On another note, maybe they out source a guy to do part time job and create "Imaginary" ULTRA HIGH NET WORTH, and sell it to the next muppet bank/broker ... crooks slaying another crooks...

 

Sun, 02/09/2014 - 13:25 | 4417303 williambanzai7
williambanzai7's picture

Sun, 02/09/2014 - 13:39 | 4417332 Money Squid
Money Squid's picture

WB - If you take requests can you do Barack as Black Dynamite - the movie? One of the best dumb movies I have seen.

Sun, 02/09/2014 - 14:14 | 4417390 williambanzai7
williambanzai7's picture

Sun, 02/09/2014 - 14:32 | 4417430 greased up deaf guy
greased up deaf guy's picture

well played, sir. lol

Sun, 02/09/2014 - 14:37 | 4417447 olenumbersix
olenumbersix's picture

fucking awesome! thanks 

Sun, 02/09/2014 - 15:56 | 4417584 ebworthen
ebworthen's picture

LOL!

This one is good too; "I'm gonna git you sucka!" - a parody of '60's and '70's blaxploitation movies, circa 1988:

http://www.youtube.com/watch?v=BddDCZwWkw0

(link opens in new window/tab)

Sun, 02/09/2014 - 16:02 | 4417683 StychoKiller
StychoKiller's picture

Well, slap my 'fro!! :>D

Sun, 02/09/2014 - 17:19 | 4417864 TORNasunder
TORNasunder's picture

Dynomite, Dynomite!

If you've not seen Black Dynamite do so, it is a classic spoof.

Note: I know I spelled Dynamite wrong, Just being true to the movie.

Mon, 02/10/2014 - 00:49 | 4418984 Barack Obama
Barack Obama's picture

I loves me some Brickwilla

I blowed yo deficit sky high

Sun, 02/09/2014 - 13:26 | 4417308 Uncle Remus
Uncle Remus's picture

Orbit, nuke, sure.

Sun, 02/09/2014 - 13:29 | 4417311 Sudden Debt
Sudden Debt's picture

is it me or is it getting more and more difficult to trust banks these days?

Sun, 02/09/2014 - 13:44 | 4417343 shitco.in
shitco.in's picture

Bitcoin requires no trust. 

Do NOT follow this link or you will be banned from the site!