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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_specialist_guides/ico_guidance_monetary_penalties.pdf
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