The new measures, which fall under data protection rules, were passed in Parliament three months ago and are part of the Government’s latest attempt to crack down on fraud. Previously the IOC could only fine small businesses up to £5,000 for serious breaches of the Data Protection Act.
Industry insiders welcomed these new powers but warned that small businesses will remain the most vulnerable targets for fraud and information thieves.
According to accountancy firm BDO Stoy Hayward losses from frauds reported by UK companies soared 76 per cent during 2009 to nearly £2.1bn, the highest total since BDO began keeping records in 2003.
Robert Guice, executive vice president of shredding company Shred-it, said: “With fraud on the rise, information security is more important than ever for businesses looking to protect their financial standing.”