Company loses 1.4m customer details

data security firm with extensive experience in financial services, to review data security across the group and advise on any necessary improvements.”

Mr East told workers Cattles is also reviewing the personal data it holds, so that any “non-essential” personal data is deleted from its records.

He also advised staff to check their bank accounts for “irregular activity” and sign up with a credit monitoring company.

A spokeswoman for the Information Commissioner’s Office (ICO) said it will be taking a “keen interest” in the case. “Any incidence of a data controller losing personal data is a concern and we will be making inquiries,” she said. “This could potentially be serious.”

She added penalties could include a fine of up to £500,000 and forcing the company to make changes to its procedures.

The FSA has declined to comment.

In a separate development, it is understood Cattles recently fired an IT manager and a second senior IT worker from a subsidiary, The Lewis Group, for data security breaches. Their departure is not believed to be related to the tapes.

The embattled sub-prime lender is being wound down after an accounting scandal which led to a multi-million pound hole in its accounts. The company is closed to new customers.

The loss comes just weeks after the civil liberties campaigners called for the Information Commissioner Christopher Graham to be given stronger powers to audit organisations amid concerns over the security of personal data.

In October, Mr Graham warned the number of data security breaches in the private sector continues to rise – with 58 per cent more having been reported to the ICO in the year to date, than in the same period last year.

Acknowledging that businesses knew their responsibilities, he added “now they just need to get on with doing it”. He added: “It’s not just the threat of a £500k fine that should provide the incentive. Companies need to consider the damage that can be done to a reputation.”