Banks on the defensive as hackers target identity theft

My pension company recently sent me a letter with my address at the top but quoting a policy number belonging to a 'Mr Round'. A contrite employee of the company promised to refer this breach of the Data Protection Act to the compliance team. If Mr Round reads The Observer and he, in turn, receives details of my pension plan, I would appeal to him to shred it as I have done with his.

With all the publicity there has been about data protection and identity fraud, such lapses by financial institutions are inexcusable but certainly not unusual.

David Porter of IT consultancy Detica, which specialises in anti-fraud measures, says technology that was meant to be a quick, cheap and efficient method for banks and retailers to interact with consumers will end up costing them dear if something is not done soon. Warnings such as this have made many people paranoid about their personal data and this is not misplaced. Last month some of the major UK banks were sent into a spin after a Sun newspaper reporter found that the banks' call-centre staff in India were willing to sell him confidential customer details.