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Australia’s No. 1 health insurer says all customer data was hacked

Medibank says a cybercriminal hacked the personal information of its 4 million customers.

Australia’s largest health insurer says a cybercriminal hacked into the personal data of its 4 million customers as the government introduced legislation that would increase penalties for companies that fail to protect customers’ private information.

Medibank said on Wednesday that “significant amounts of health claims data” had also been accessed in the breach, which was reported to police a week ago when trading in the company’s shares was halted.

The thief demanded a ransom and reportedly threatened to expose the diagnoses and treatments of high-profile clients.

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Medibank said its priority was to uncover the specific stolen data related to each customer and share that information with those customers.

The company had previously said the breach was thought to be limited to its AHM subsidiary and foreign students.

“Our investigation has now established that this criminal has accessed all of our private health insurance customers’ personal data and significant amounts of their health claims data,” Medibank CEO David Koczkar said in a statement to the Australian Stock Exchange.

“This is a terrible crime, it is a crime designed to cause maximum harm to the most vulnerable members of our community,” Koczkar added, apologizing to customers.

The government has been planning urgent legislative reforms on cybersecurity regulation ever since a hacker stole the personal data of nearly 10 million current and former customers of Optus, Australia’s second-largest wireless telecommunications operator.

Optus realized on September 21 that the personal data of more than a third of Australia’s population of 26 million had been stolen.

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Introducing amendments to the Privacy Act to Parliament on Wednesday, Attorney General Mark Dreyfus named both companies and MyDeal, an online retail broker that lost the data of 2.2 million customers in a hack revealed two weeks ago.

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“As the Optus, Medibank and MyDeal cyberattacks have recently highlighted, data breaches have the potential to cause serious financial and emotional harm to Australians, and this is unacceptable,” Dreyfus told Parliament.

“Governments, businesses and other organizations have an obligation to protect Australians’ personal data, not to treat it as a business asset,” Dreyfus added.

The government criticizes companies that amass more customer data than is necessary to make money from it in ways unrelated to the services for which the information was provided.

Penalties for serious breaches of the Privacy Act would increase from A$2.2 million to A$50 million (between $1.4 million and $32 million) under the proposed amendments.

A business could also be fined the value of 30 per cent of its revenue over a defined period if that amount exceeds A$50 million ($32 million).

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Medibank said on Wednesday it had no cyber insurance and estimated the attack would cut its profits by A$25 million to A$35 million ($16 million to $22 million) early next year.

The Medicare trading halt was lifted on Wednesday and shares fell more than 14 percent in early trading.

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