Third parties take data loss blame.

Third parties take data loss blame

Tracey Caldwell

As yet more companies own up to large-scale losses of personal data, a survey has found that the risk of confidential data being lost or stolen is 43% higher when it is outsourced rather than held in-house.

Paul Bates, managing director of customer relationship management business StrongMail UK, commissioned the study by research company Ponemon of data losses by outsourcers following a similar US-based study.

Almost two-thirds (61%) of the businesses surveyed admitted the loss or theft of customer data over the past two years. In 90% of these cases, the loss or theft went unreported to the authorities because the organisations either did not realise they were required to under the Data Protection Act or did not know who to inform.

"Most companies outsource email marketing and give their database to third parties to send out emails on their behalf," said Bates. "We wanted to get a flavour of the behaviour of the marketing and data people within the companies. Some people are cowboys and show a complete disrespect and disregard for data."

A fifth of respondents said they handed over customer financial information such as credit card details so that outsourcers could manage transactional processes.