TalkTalk has been hit by a major data breach, with online criminals obtaining account numbers, addresses and phone numbers for some of its home broadband customers.
The broadband provider admits a third-party contractor, which had legitimate access to its customer accounts, lost data belonging to some of its four million subscribers.
According to the Guardian, TalkTalk has begun legal proceedings against the firm.
"We have become aware that some limited, non-sensitive information about some customers could have been illegally accessed in violation of our security procedures," TalkTalk stated.
"A small, but nonetheless significant, number of customers have been targeted by these criminals and we have been supporting them directly."
TalkTalk has received a series of complaints from subscribers claiming to have been targeted by crooks.
One of them is semi-retired HR consultant Graeme Smith, from County Durham, who sadly fell for the scam. He had £2,815 stolen from his Santander bank account by criminals pretending to be from TalkTalk's fraud team.
Using his broadband account details and personal information, they gained the victim's trust and coerced him into downloading dangerous malware onto his laptop.
This allowed the hackers to take control of the computer and access his bank account.
TalkTalk said it is "sorry" that Mr Smith was targeted by a "highly vicious" scam, noting that it remains in contact with him to provide support.
"We would urge customers who have been victim to any scam where they have revealed financial information to contact their bank," the firm stated.
TalkTalk moved to reassure its broadband customers, explaining that no sensitive information - such as bank account details - had been illegally accessed during the data breach.
As such, hackers do not have direct access to any customers' accounts.
"We want to help our customers protect themselves from scams, so we are writing to all customers again to warn them about this criminal activity, with full advice, support and a reminder of the many free services TalkTalk offers to try to stop malicious scams reaching them," the broadband provider stated.