14,000 victims of child benefit discs fiasco sign up to website that 'could win them £300'

HM Revenue and Customs staff lost the details of all 25million child-benefit claimants when two computer discs went missing late last year.

Chancellor Alistair Darling admitted in the Commons that the discs, containing detailed information on seven million families, had disappeared in the post.

Despite an intensive police investigation, they have never been found.

The discs held many details which could be used by criminals for widespread identity fraud, including dates of birth, addresses, bank accounts and national insurance numbers.

So far 14,000 people have registered with Alternative Dispute Resolution Services, a legal assistance firm based in Newcastle-upon Tyne, which is offering a £5.99 pack to help them pursue a claim against the Government.

Director Philip Knight said: "A letter saying sorry for its mistake is all very well, but the Revenue has failed to mention that the loss of this personal information is a clear breach of the Data Protection Act.

"Under that law, anyone affected by the loss of personal data is entitled to claim compensation from those who were responsible for mishandling it."

The move is the latest example of how ordinary consumers are taking action in a bid to force large organisations to pay compensation for their mistakes.

For the past few years, a huge number of bank customers who felt they had been penalised with unfair or excessive charges have been taking the matter to the courts, which has resulted in large sums being repaid.

Under data-protection rules, parents affected by the HMRC blunder could be entitled to payouts ranging from £50 to £300, plus extra on behalf of their children.

If they all secured the maximum level of compensation, it would leave the Government with a £7.5billion bill.

But for the claims to go ahead, information commissioner Richard Thomas would have to find the HMRC guilty of breaching the Data Protection Act.

Mr Thomas does not have powers to offer compensation but he can issue an enforcement notice ordering HMRC to make good the deficiencies which led to the loss of data.

Treasury sources said last night that if the mass claims went ahead, it would not bail out the Revenue, which would have to find the money itself.

For now, all claims are on hold until completion of an official inquiry by Kieran Poynter, the chairman of accountants PricewaterhouseCoopers. His report is due in June.

HMRC said last night that there was no evidence anyone had been defrauded as a result of the loss of the discs, so no money had been set aside for compensation.

A spokesman added: "We do not accept that individuals would have a valid claim for damages under the Data Protection Act."

For information on how to pursue a claim, visit www.thisis money.co.uk/disc-claim.