The Government is seeking the advice of the FSA after the loss by HMRC of computer discs containing the confidential details of 25 million people.
The Government wants to understand how the personal details, which include names, addresses, national insurance as well as bank and building society numbers, can be used fraudulently.
Giving a statement in the House of Commons this afternoon, Chancellor Alistair Darling also said it is in contact with banks and other financial institutions regarding the loss of the data.
Chairman of HMRC, Paul Gray, resigned earlier today after news of the security breach, which happened on October 18, spread.
Darling outlined the actions of HMRC and National Audit Office (NAO) staff leading up to the loss of the personal data.
He said a junior official sent two computerised discs to the NAO on October 18, directly contravening HMRC rules. He also said HMRC failed to report the lost discs for three weeks.
Darling revealed the steps the Government has taken to ensure the lost data can not be used fraudulently.
He said it is working with the Metropolitan Police, who have mounted a full scale search for the missing discs. The search has so far proved fruitless.
Darling reassured members of the public that the police have “no reason to believe” the information has “fallen into the wrong hands”.
He said banks and building societies are “flagging” all affected accounts, and backdating their searches to October 18 when the discs went missing.
He also said the Government guarantees to reimburse any individuals that suffer financial loss as a result of HMRC’s mistake.
“This is an extremely serious matter,” he said. “HMRC has a responsibility to the general public who entrust them with highly sensitive information.
“It has failed to meet the high standards expected of it. I deeply regret this and apologise for the anxiety that this will have caused.”
Shadow Chancellor George Osbourne said the situation is reason enough for the Government to scrap its controversial proposals for national ID cards as it cannot protect large volumes of data.
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Have your say:
"How many times must HMRC have to learn before it teaches its staff the need to treat others data as if it were their own. Something is very very seriously wrong.
"By the way -- this (item below) was your expose on the Standard Life debacle.
HMRC says: "We have put in place precautionary measures to check our customers’ records for any fraudulent activity and are taking steps to minimise the risks of a similar incident happening in the future."
"Strangely, if one notes the word MINIMISE; it appears to indicate a sneaking suspicion it may happen again."
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