Two backup storage tapes have been lost by Cattles Group, containing the data of 1.4 million people, mainly customers of Shopacheck loans.
Cattles Group, which runs the Shopacheck loans, said that out of the lost data, some 600,000 people's names, addresses, date of birth and payment history was lost. Another 200,000 people's names and addresses were lost, but their file did not contain the other information.
Additionally, staff data was lost for a number of employees who started at the company before October.
Shopacheck provides short term loans, and on its website it advertises a product at 400 percent APR interest rate - whereby a £300 loan over 32 weeks would cost as much as £480. Financial experts have expressed concern that consumers are increasingly using such "payday loans" as they struggle to meet rental payments and other regular essentials.
Cattles said it was advising customers and employees of the data loss incident, but insisted there was "no evidence that the information has fallen into the wrong hands or been used maliciously".
The tapes went missing in November from a Cattles Group building in Birstall, Yorkshire. It is understood that the Information Commissioner's Office, which was informed, is starting an investigation.
A spokesperson at Cattles said the company "deeply regrets" the incident. "We have employed a specialist data security firm with extensive experience in financial services, to review data security across the group and advise on any necessary improvements," he said.