Firms have been advised that they should place more importance on making sure their data protection systems are up to scratch.

Law firm Denton Wilde Sapte explained that fines and further action from the Financial Services Agency are always a threat to companies who fail to keep their customers' private information secure.

Martin Fanning, a data protection specialist at the law firm said that "good data handling is very much a hot regulatory topic" due to the recent privacy breach at HM Revenue and Customs which saw the loss of the personal information of 25 million people receiving child benefit.

Due to this extra scrutiny on the issue, Mr Fanning suggested that firms undertake a full audit of the way they deal with private data to make sure they are meeting their responsibilities.

"Regular data protection audits are badges of good governance," Mr Fanning said.

"By including these review mechanisms within existing audit functions, organisations can optimise their use of these forward-looking risk management tools."