Original URL: http://www.theregister.co.uk/2007/11/20/hmrc_huge_data_loss/

How HMRC gave away the UK's national identity

Gov, banks scream 'Don't Panic'

By John Oates

Posted in Government, 20th November 2007 17:42 GMT

UK Identity Crisis Early last month Her Majesty's Customs and Revenue apologised after a laptop containing data on 400 customers was stolen. At the time the Revenue was praised by the security industry for coming clean and its "refreshing level of ethical responsibility".

Earlier this month that it had lost pension records for 15,000 people which were put on a CD and sent, possibly unencrypted, by courier to Standard Life's Edinburgh headquarters.

So it seems unlikely that many will be lining up to congratulate Chancellor Alistair Darling today after it emerged that the Revenue has lost a staggering 25 million customer accounts.

In fact, the Revenue could easily have lost the data three times. The CDs were sent first in April in breach of HMRC's own procedures. This month the database was again put on CD and sent to the National Audit Office not once, but twice. We should count ourselves lucky that the data has, apparently, only been lost once.

Still, by sending the data by CD we cannot be sure where it has gone or who has seen it. Several Reg reader comments pointed out that CDs are no way to be transporting sensitive information. The details of how you do so are not important - using CDs simply cannot provide a secure delivery.

Police are still investigating and the search is focussed on the Child Benefit office in Waterview Park, Washington, Sunderland.

It won't take long for them to get their heads round the complexity of the revenue's internal mail system. One staff member at HMRC who contacted The Register explained how the grid mail system works.

"Imagine an A4 sized envelope, with a set of gridlines printed on one side, three columns by 30 or so rows, making 90 boxes. When you want to send stuff internally between Civil Service offices, you get one off the pile, drop your stuff into it and scribble the recipient name and office number in one of the boxes.

"You then leave it in a tray for the Internal Mail people to collect, it goes down to the post room and after a period of time elapses, it arrives at the destination. You get the stuff out, scribble out the last set of details and drop the grid on the 'to be used' pile.

"There's no security, given that the grids are not stuck down, but sometimes you get the more security-aware users sticking a label across the seal and signing it, so there's some evidence if it's tampered with."

Even 25 years ago, who could have possibly thought this is a safe way to send private information about 25 million people?

Still, the Inland Revenue issued the following statement for worried recipients of child benefit: "If you are concerned about the potential HMRC data compromise, please telephone the HMRC dedicated Child Benefit Helpline on 0845 302 1444. Whilst there is no evidence that the lost data has fallen into criminal hands we have produced customer advice, containing questions and answers, as well as top tips on spotting and stopping ID theft."

APACS, the UK bank payment system, reassured customers that even if the CDs did end up in the wrong hands they did not contain enough information on their own to conduct fraud.

Paul Smee, chief exec at APACS, said: "In the event that anyone is the innocent victim of fraud as a result of this incident customers can have peace of mind that they enjoy protection under the Banking Code which means that you should not suffer any financial loss as a result.

"The banking industry would like to reassure its customers that sort code and bank account, national insurance number, date of birth, name and address details are not enough in themselves for an ID fraudster to access your bank account – as additional security information and passwords are always required."

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