Missing data

There has been a worrying spate of breaches in data security of late, which has fuelled public paranoia that we could be facing one of the largest instances of identity theft and fraud in recent times.

First it was the data discs that mysteriously disappeared due to the negligent behaviour of junior staff at HM Revenue & Customs. The discs contained the personal information of almost half of the entire population of the UK. Intimate details of nearly 30 million child benefit recipients in the UK are now AWOL - such as names, addresses and bank details.

In the wrong hands, countless people could see their banks accounts wiped clean over night. This fiasco has been made even worse by the recent revelation about another embarrassing blunder.

The government admitted that it has lost the records of more than three million learner drivers from a "secure facility" in Iowa in America. Evidently it was not so secure.

Transport Secretary Ruth Kelly told the House of Commons that the latest security breach did not include personal data such as credit card or bank details but is nevertheless another blow to the already beleaguered government.

Labour is behind the Conservatives in the latest opinions poll - for the first time since the government grabbed the reigns of power back in 1997. This is in no small part, due to the public's rapidly decreasing confidence in the government and its economnic and security skills.

Today, it was announced in the papers that Britain's biggest insurer, Norwich Union, was fined £1.26 million yesterday after it failed to protect customers' confidential details from fraudsters who cashed in policies worth £3.3 million.

The Financial Services Authority said the weaknesses in Norwich Union Life's call centre security checks potentially exposed seven million customers to the risk of ID theft and financial loss.

In times when confidence in the government is at a near all time low and confidence in the economy is on extremely shaky ground, this news comes as quite a coup de grace.

The meticulously organised fraud occurred at the insurance company in early 2006 when criminals contacted Norwich Union Life call centres pretending to be genuine customers.

By providing people's names, addresses and dates of birth, the fraudsters were able to get access to sensitive customer details such as policy numbers and bank details.

The con artists then instructed Norwich Union Life to give up the proceeds of customers' policies to bank accounts which was in their control. They succeeded in 74 cases but attempts were made on a further 558 policies.

It was only until the end of July 2006 that the company knew the criminals were using publicly available information to get past Norwich Union Life's caller identification procedures - and it still did not change its systems.

"We are sorry that this situation arose and apologised to the affected customers when this happened," said Mark Hodges, chief executive of Norwich Union Life.

"We have extensive procedures in place to protect our customers but in this instance weaknesses were exploited and we were the target of organised fraud," he added.