Computer discs holding personal data on 25 million people and 7.2 million families have gone missing, Chancellor Alistair Darling has told MPs.
He said the details included names, addresses, dates of birth, Child Benefit numbers, National Insurance numbers and bank or building society account details.
Paul Gray, chairman of Her Majesty’s Revenue and Customs (HMRC), which lost the discs, resigned over the affair yesterday.
The Metropolitan Police have confirmed they are investigating the loss of the password-protected discs which were wrongly sent last month to the National Audit Office (NAO) but never arrived.
Mr Darling said police had no evidence the information ‘has found its way into the wrong hands’ or that it has been used for fraud.
The latest revelation comes just days after it emerged that the same government department had also lost a CD containing information on thousands of Standard Life customers.
The CD contained details on around 15,000 Standard Life pensions customers, including their names, National Insurance numbers, dates of birth and other personal details.
It was sent by courier from HM Revenue & Customs offices in Newcastle to Standard Life’s Edinburgh headquarters but it failed to arrive.
The CD contained enough information for a fraudster to be able to commit identity fraud and apply for credit and even benefits in the customers’ names.
Standard Life realised the disc was missing on 22 September but it was more than four weeks later that it sent out letters to all of its customers warning them to be vigilant to the threat of identity theft.
However the insurer stressed yesterday that the CD was encrypted, so would have been difficult for a fraudster to read.
Identify theft is Britain’s fastest growing crime and costs the economy an estimated £1.7 billion a year.
It involves fraudsters building up personal information about a person and then using it to apply for credit and benefits in their name.
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