Leicester City Council has confirmed that it has reported the loss of a USB stick containing the security codes and medical information on thousands of at risk people to the Information Commissioner's Office (ICO).
The stick was lost by LeicesterCare, the division responsible for looking after elderly and vulnerable citizens in Leicester, but a council spokesperson said that the stick could not be used by anyone who found it, suggesting that the dat was encrypted.
"We can confirm we are investigating the possible loss of a data device that contains personal details of around 4,000 LeicesterCare users. At this time we have no reason to believe this data has been removed deliberately," the spokesperson said.
"However, while we have been assured by our supplier that the information on the device is not accessible to anyone who may find it, we are taking every precaution to maintain the security of our LeicesterCare users."
The council is changing the keysafe codes of the 2,000 affected users as a precautionary measure, and expects to have this completed by Friday.
A spokesperson for the ICO confirmed that the watchdog had been notified of the incident and will look into the exact circumstances before any action is taken.
"We have recently been informed of a possible data breach which may involve Leicester City Council," the spokesperson said.
"We will be making enquiries into the circumstances of the alleged breach of the Data Protection Act before deciding what action, if any, needs to be taken."
On Tuesday information commissioner Christopher Graham confirmed that a fifth fine was in the offing as the ICO seeks to clamp down on poor data handling practices at UK organisations.
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