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Lost CD may put pension holders in peril

HMRC dodges cryptic question

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Thousands of customers of UK insurer Standard Life have been left at risk of fraud after their personal details were lost by HM Revenue & Customs (HMRC).

Data on 15,000 pension policy holders, sent in a CD from HMRC offices in Newcastle to Standard Life's Edinburgh headquarters by courier, never arrived.

The lost disc contained names, national insurance numbers, dates of birth, addresses, and pension data. Information such as this would easily lend itself to abuse by crooks if it fell into the wrong hands. Providing fraudsters were able to read the disc they might be able to apply for loans or credit cards under false names.

News of the loss of the disc, which should have arrived five weeks ago, emerged over the weekend after Standard Life sent out warning letters to its clients. Standard Life's director for customer services, John Gill, told BBC Radio 4's Money Box program: "We have no evidence that the disc has fallen into third party hands and we have also been closely monitoring all the accounts and have seen no indications of any suspicious activity."

UK tax authorities reportedly routinely send confidential data on taxpayers to their pension providers via CD, a procedure that has been found wanting of late. A second CD containing information on customers of an unnamed second insurer has also gone missing, the BBC reports.

HM Revenue has declined to confirm whether the data on the disks was encrypted or not.

This latest in a seemingly never-ending series of security breaches by large organisations on either side of the Atlantic shows the issue is far from confined to lost laptops or leaky database servers. Some organisations have become repeat offenders.

Only last month, for example, HM Revenue lost a laptop containing the personal details of 2,000 people with investment ISAs. In May, Standard Life sent around 300 policy documents to the wrong people.

Security vendors were quick to point to the benefits of encryption in preventing customer information security breaches. "This latest leak shows how easy it is for personal data to go astray, even when being delivered personally," said Nick Lowe, Check Point's regional director for Northern Europe.

"Data needs to be protected wherever it is, whether it's in motion on a CD or laptop computer, or at rest within the company network. Strong encryption really is the only way to achieve this, and the encryption should be automated so that it happens without users' intervention." ®

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