LONDON, Nov. 21 — Prime Minister Gordon Brown of Britain apologized today for a security breach that resulted in the loss of millions of Britons’ bank account details and other personal data and has raised the specter of financial fraud on a massive scale.
The data went astray when two computer discs from the tax authorities were lost in the mail last month. The discs contained information on 25 million people — or nearly half the British population — from families that receive a government financial benefit for children.
The information included details like names, addresses and national insurance numbers — the British equivalent of social security numbers — as well as similar information on almost every child under 16 in Britain. The discs were sent using a private parcel delivery firm, and were apparently protected by a password but were not encrypted.
Analysts said the data breach highlighted the difficulty of keeping personal information secure at a time when governments, businesses and other organizations house vast storehouses of information about taxpayers and consumers.
The incident was a further embarrassment to Mr. Brown’s government, and particular the chancellor of the Exchequer, Alistair Darling. The government has also been criticized for its oversight of a troubled bank, Northern Rock, which was caught in the recent global credit crisis.
The data breach was discovered on Nov. 8 and both Mr. Brown and Mr. Darling were informed two days later. The government launched an investigation, but only disclosed on Monday that the breach had taken place. Mr. Darling said that he had delayed the announcement because banks had wanted time to prepare and put in safeguards.
“In making this statement today, I have had to balance the imperative of informing the House and the public at the earliest opportunity, whilst at the same time ensuring that when I did so the appropriate safeguards were in place to protect the public, including in relation to bank accounts,” he said in a statement Tuesday. “Indeed the banks were adamant that they wanted as much time as possible to prepare for this announcement.”
Experts said that so far there were no signs that the data was being used for fraudulent activity.
“I profoundly regret and apologize for the inconvenience and worries that have been caused to millions of families that receive child benefits," Mr. Brown said today in the House of Commons. "We have a duty to do everything that we can to protect the public."
All families with children are eligible for a weekly payment of the equivalent of $37 for the first child, and $25 per additional child. Those who choose to have the money deposited directly into bank accounts must provide their account information to the government, so in at least some cases those numbers were also lost.
A spokeswoman for the British Bankers Association, Lesley Mcleod, said that its member institutions had found no signs of unusual account activity back to Oct. 18, when the breach was made.
But experts said the information could, in some cases, be used to commit identity theft or other financial crimes if it fell into the wrong hands. Some people, for instance, use the name of a child or part of an address as a password on a bank account, so the combination of these details might provide clues for would-be criminals, they said.
“Even though there’s no indication that anything illegal has happened, people might feel more secure if they changed any passwords that resemble these bits of information,” said Ms. Mcleod.
Mike Maddison, head of security and privacy services at the consulting firm Deloitte, said the information should have been sent in encrypted form, whether by disc or electronically, and through secure mail services. “In the digital age, information is ubiquitous, flowing through places it might never have been before,” he said. “In terms of privacy protection, expectations are certainly higher than ever before, but also the threat to information has never been more significant.”
Mr. Brown said he had ordered a review of the handling of private data by government agencies after the incident, which he said was caused by someone following improper procedures.
Her Majesty’s Revenue & Customs, the British equivalent of the Internal Revenue Service uses a parcel delivery firm, TNT, which operates in competition with the Royal Mail, for its mail deliveries.
While the security breach appears to have affected close to half of the British population of about 60 million people, in sheer numbers it was smaller than an incident involving a loss of records from the United States Veterans Administration last year, which affected 26.5 million former service personnel.
In 2004, the Internet company AOL lost 92 million email addresses when they were stolen by a former employee.
Daily Joke (10)
The Bad Son!
Four men got together to play golf one sunny morning. As they were heading out to the course, one of them was detained by a phone call. The other three were discussing their children while walking to the first tee.
"My son," said one proudly, "has made quite a name for himself in the home building industry. He began as a carpenter, but now owns his own design and construction firm. He's so successful in fact, in the last year he was able to give a good friend a brand new home as a gift."
The second man, not to be outdone, tells how his son began his career as a car salesman, but now owns a multi-line dealership. "He's so successful, in fact, in the last six months he gave a friend two brand new cars as a gift."
The third man brags that his son has worked his way up through a stock brokerage firm, and has become so successful that in the last few weeks has given a good friend a large stock portfolio as a gift.
As the fourth man arrives at the tee box, the three smugly tell him that they have been discussing how successful their progeny are, and ask what line his son is in. "To tell the truth, I'm not very pleased with how my son has turned out," he replies. "For fifteen years, he's been a hairdresser, and I've just recently discovered he's a practicing homosexual."
As the other three recoil in horror, he continues, "but, on the bright side, he must be good at what he does, his last three boyfriends have given him a brand new house, two cars, and a big portfolio of stock certificates."
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