Data protection - greater risk of attacks on companies' reputations
15 January 2008
There seemed to be a plethora of cases of personal data being lost in 2007. The most high profile of these was obviously the loss of the two discs containing personal details of 25 million Britons by HM Revenue & Customs last November. In the same month, 15,000 Standard Life customers were told they could be at risk of fraud after a disk containing personal information went missing. That followed the revelation by the retailer behind TK Maxx that 45.6 million credit card numbers had been stolen from its system.
The response of the Information Commissioner, who is responsible for overseeing the enforcement of the Data Protection Act, has been to push for tougher powers. No doubt as a result of the huge media attention the issue received towards the end of last year, the campaign for greater clout is now gathering pace. For example, last month the Information Commissioner was awarded the right to stage unannounced spot checks on organisations to see how they handle and protect personal information.
It is not yet known exactly how the spot checks will work although it is likely that companies which fall foul of the data protection requirements will be publicly named and shamed. The Information Commissioner has previously stressed the roles of reputation and consumer pressure in ensuring compliance with data protection laws, particularly with reputable private sector businesses. The legal sanctions for data protection breach are fairly limited (although many, including a recently formed committee of MPs, are lobbying for the offence to be made criminal). Yet already the potential to destroy a company’s reputation by accusing it of threatening customers’ safety is massive.
As a result of the new measures, there is now a greater risk that companies will be attacked by the media for breaching their data protection obligations. Of course, as all PROs know, prevention is better than a cure. Consequently, companies would be well advised to ensure their houses are all in order so as to avoid potentially ruinous headlines over the coming year.
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First published on Gorkana as part of Schillings' regular contribution to their site.
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