25 million people have been put at risk from fraud after a Government official sent the entire child benefit database through the post.

The names, addresses, National Insurance numbers and bank details of every single person who claims child benefit in this country are now lost in the post.

Child benefit data was burned on to two CDs by a junior IT worker after the National Audit Office (NAO) in London had requested some limited information. He then left the password-protected CDs in the post room for collection by TNT couriers, but they never arrived at the NAO.

Police have now launched the country’s biggest ever investigation into possible identity theft.

Child benefit data is not supposed to leave the offices in Washington, Tyne and Wear, and critics have said that the NAO officials should have been invited to view the data on a single computer in a secure room, rather than data being sent on disks. When the CDs failed to arrive two more were posted ? an action that was, this time, approved by senior staff. These CDs were received by the NAO.

TNT carries up to 100,000 pieces of mail for HM Revenue and Customs (HMRC) every working day, and they have said, because the first CD of child benefit data was sent in the general mail, there is no ‘track and trace’ facility.

Apacs, the banking industry body that overlooks payments systems in Britain, is now on high alert for suspicious activities.

Chancellor Alistair Darling has described the loss of the child benefit data as ‘catastrophic’: ‘There’s no doubt in my mind there have been very, very serious breaches here,’ he said. ‘People are entitled to trust the government to look after information that is given to it – for child benefit or any other purposes – and that did not happen here.’

Timeline of the loss of the child benefit data:

October 18: Junior official sends two password-protected CDs with all child benefit claimant information to NAO. They fail to arrive.

Late October: Two more CDs of child benefit data are sent to the NAO, and these arrive.

November 8: Washington managers tell Paul Gray, chairman of HMRC, of the missing CDs.

November 10: Chancellor Alistair Darling is told. He tells Gordon Brown immediately.

November 14: Mr Gray offers to resign.

November 16: Mr Darling calls in Scotland Yard.

November 20: Mr Darling tells Parliament of the lost CDs and announces Mr Gray’s resignation.

25 million people are now thought to be at risk from ID fraud as a result of the first batch of CDs being lost in the post, but Scotland Yard have now dramatically increased the number of officers working on the case, and are assessing the risk of the child benefit data being used fraudulently.

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