The electoral register is widely used by online businesses, banks, and credit agencies to verify the identity of people making online credit card purchases, to protect businesses against fraud and assess the credit-worthiness of customers.
Local authorities have suspended sales of the electoral register following a court judgement that ruled that its sale for commercial use breaches data protection and human rights laws.
The decision, which came just as local authorities are preparing to sell the latest run of the electoral roll, has prompted frantic meetings between councils, government departments and credit reference agencies.
The Electoral Commission, the independent organisation responsible for the electoral roll, is planning to push through new guidelines to local authorities tomorrow (Friday).
One option is for local authorities to create a separate electoral database for voters that do not want their details sold on, creating more work for IT professionals when money is tight and e-government deadlines are looming.
The court ruling outlaws the sale of the register to commercial organisations unless local authorities gain the consent of the voters.
Credit reference companies said this week the decision would make it far more difficult for retailers to sell over the Internet and the telephone and could lead to customers being refused credit.
Credit reference company Experian spokesman Bruno Rost said, "The electoral roll enables lenders to confirm individuals' addresses and enables modern channels to market, like the Internet and phone."
Without access to the electoral register lenders would be unlikely to take on extra risks. A paper-based replacement could cost £500m and make it more difficult for consumers to find credit, Rost said.
Credit checker Equifax said it was in talks with government departments about the impact of the ruling. If they do not produce a solution, it would consider taking local authorities to court. Public affairs director Barry Conroy said, "But we don't expect it to come to that."
The ruling has called into question plans by chancellor, Gordon Brown to crack down on money laundering, following the terrorist attacks in September. Banks need access to the electoral roll to carry out checks.
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