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No fraud uncovered in data loss

17/12/2007

No evidence of fraud has been uncovered following the loss of the confidential details of 25 million child benefit claimants, the chancellor has said.

Alistair Darling told the House of Commons that neither detectives investigating the mislaying of two data CDs or banks themselves had noted any related ID theft.

The chancellor was speaking to MPs to update them on the progress of a review into data security at HM Revenue and Customs (HMRC).

The inquiry, headed by Kieran Poynter, chairman of PricewaterhouseCoopers, was launched after it emerged the department had lost two computer discs containing the personal details of seven million families.

Last month Mr Darling apologised for the security lapse, which occurred after a junior official at HMRC mailed the full child benefit database to the National Audit Office (NAO) through the taxman's internal post service – run by a private courier company.

The data loss prompted fears the sensitive information could be used to commit identity theft if it fell into the wrong hands.

Shadow chief secretary to the Treasury Philip Hammond says the loss is the "most catastrophic data security breach in British history".

But speaking today the chancellor said: "The police have reiterated that they have no information or intelligence that the data has fallen into wrong hands.

"The banks too say they have found no evidence of any activities suggesting evidence of fraud arising from this incident. They continue to monitor closely the accounts concerned so they can see immediately if there is any unusual or irregular activity."

While Mr Poynter does not expect to conclude his report and make his final recommendations until next year, Mr Darling explained that a number of measures had been taken at HMRC already.

A complete ban on the transfer of bulk data has been imposed, while laptops used to move details on to removable media have been disabled.