Small businesses are lagging behind their larger counterparts when it comes to awareness of the Data Protection Act, according to new research.

The study, published by the Information Commissioner’s Office (ICO), found that just over half of small companies recognise the importance of keeping customer information secure, compared to 70 per cent of large businesses.

What’s more, 22 per cent of SMEs were aware of the need to keep consumer data accurate and up to date under the rules of the Data Protection Act, in comparison to 57 per cent of large corporations, according to the study.

“In an age where the risk of identity fraud is increasing these findings are of considerable concern,” Information Commissioner Richard Thomas, said today at the Privacy and Data Protection conference.

“Businesses, large and small, have a responsibility to ensure their customers’ information is secure and accurate. Companies must take this responsibility seriously. The majority of businesses are complying with the Act but my Office will not, and does not, hesitate to take action against the few businesses which are failing to protect their customers’ personal information effectively.”

The privacy watchdog has also released training guidance on its website for small and medium sized businesses to help staff understand the data protection requirements.