Press Release
Date: 12 January 2010
Data breaches to incur up to £500,000 penalty
New powers, designed to deter personal data security breaches, are expected
to come into force on 6 April 2010. The Information Commissioner’s Office
(ICO) will be able to order organisations to pay up to £500,000 as a penalty
for serious breaches of the Data Protection Act. The ICO has produced
statutory guidance about how it proposes to use this new power, which has
been approved by the Secretary of State for Justice, and has been laid
before Parliament today.
When serving monetary penalties, the Information Commissioner will carefully
consider the circumstances, including the seriousness of the data breach;
the likelihood of substantial damage and distress to individuals; whether
the breach was deliberate or negligent and what reasonable steps the
organisation has taken to prevent breaches.
Information Commissioner, Christopher Graham, said: “Getting data protection
right has never been more important than it is today. As citizens, we are
increasingly asked to complete transactions online, with the state, banks
and other organisations using huge databases to store our personal details.
When things go wrong, a security breach can cause real harm and great
distress to thousands of people. These penalties are designed to act as a
deterrent and to promote compliance with the Data Protection Act. I remain
committed to working with voluntary, public and private bodies to help them
stick to the rules and comply with the Act. But I will not hesitate to use
these tough new sanctions for the most serious cases where organisations
disregard the law.”
The Information Commissioner will take a pragmatic and proportionate
approach to issuing an organisation with a monetary penalty. Factors will be
taken into account including an organisation’s financial resources, sector,
size and the severity of the data breach, to ensure that undue financial
hardship is not imposed on an organisation.
The power to impose a monetary penalty notice is designed to deal with
serious breaches of the Data Protection Act and is part of the ICO’s overall
regulatory toolkit which includes the power to serve an enforcement notice
and the power to prosecute those involved in the unlawful trade in
confidential personal data.
Box out
For a data breach to attract a monetary penalty the Information Commissioner
must be satisfied that there has been a serious breach that was likely to
cause damage or distress and it was either deliberate or negligent and the
organisation failed to take reasonable steps to prevent it.
Example – damage
Following a security breach by a data controller financial data is lost and
an individual becomes the victim of identity fraud.
Example - distress
Following a security breach by a data controller medical details are stolen
and an individual suffers worry and anxiety that his sensitive personal data
will be made public even if his concerns do not materialise.
Example - deliberate
A marketing company collects personal data stating it is for the purpose of
a competition and then, without consent, knowingly discloses the data to
populate a tracing database for commercial purposes without informing the
individuals concerned.
The guidance can be downloaded from the ICO website at
http://www.ico.gov.uk/upload/documents/library/data_protection/detailed_spec
ialist_guides/ico_guidance_monetary_penalties.pdf
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