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TalkTalk share price renews slide as cyber-attack fallout deepens

Veselin Valchev
  • October 28th 2015, 13:35
  • Last Updated: October 21st 2019, 14:38

Talktalk Telecom Group Plc (LON:TALK) shares were about four percent in the red during midday trade in London today, following fresh concerns with regards to the company’s stance on contract termination fees following last week’s cyber-attack.

The broadband provider said on its website yesterday that it will waive termination fees for customers wanting to end their contracts only if the attack was the direct cause of money being stolen from them.
“In the unlikely event that money is stolen from a customer’s bank account as a direct result of the cyber-attack [rather than as a result of any other information given out by a customer], then as a gesture of goodwill, on a case-by-case basis, we will waive termination fees,” the company said.
The decision rules out waivers for many customers, who gave away their bank and personal details to scammers in the wake of the scandal. Richard Lloyd, executive director of consumer association Which?, has gone on record to opine that TalkTalk is not treating its customers fairly.
“TalkTalk must treat their customers fairly by letting those affected leave their contracts without penalty and consider offering appropriate compensation.”
Analysts said the move will limit short-term losses, but it will do little to help the company retain customers in the mid-term.
“I really do believe that TalkTalk’s corporate reputation has been very seriously damaged because of this hack,” Richard Holway, chairman of TechMarketView, said as quoted by the Financial Times. “Why would you want to stay with TalkTalk? I still have some concern whether the company will withstand this in the medium term.”
Holway argued earlier this week that TalkTalk might need to rebrand in order to limit the damage caused by the attack, while he also said the telecom could soon become a takeover target from rivals.
Meanwhile, the 15-year-old boy who was arrested yesterday in connection with the attack has been released on bail. The arrest of such a young suspect, alongside experts’ claims that the attack was relatively unsophisticated, has raised concerns that the company may be seriously at fault.
Ultimate responsibility lies with chief executive Dido Harding, the Financial Times said, adding that similar attacks at companies in the US have forced executives out of their jobs.
MPs said on Monday that an inquiry into the cyber-attack would be launched to examine why customer bank details were at risk and how hackers were able to access them.
TalkTalk’s share price had slid 3.57 percent to 246.00p as of 13:17 GMT today. The firm’s stock rallied some 13 percent on Tuesday, reversing most of the losses since the attack was revealed.
As of 13:37 GMT, Wednesday, 28 October, Talktalk Telecom Group PLC share price is 246.30p.

About the author

Veselin Valchev
Veselin is a data scientist with extensive experience in commodities and natural resources within the FTSE 100. His data analysis skills ensure he reports without missing the fine details.

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