Norwich Union Life has been fined £1.26 million for failing to protect customers’ personal details after fraudsters stole £3.3 million from policyholders. The Financial Services Authority (FSA) said the insurer had failed to take reasonable care to look after policyholders’ details and protect itself and them from the risk of paying out policies to fraudsters.

The failures were highlighted by a number of frauds carried out against customers in mid-2006, when criminals used publicly available data such as names and addresses and dates of birth to impersonate Norwich Union customers.

In a series of telephone calls to Norwich Union Life, the fraudsters obtained confidential information and were able to change customers’ details so that policies were paid out to the wrong accounts. Over 632 policies were targeted, and 74, worth a total of around £3.3 million, were surrendered to fraudsters.