The Information Commissioner's Office (ICO) has warned that organisations may face tougher sanctions if they fail to report security breaches that later come to light.
Firms that incur serious data breaches could be fined up to £500,000 when new statutory guidelines come into force on 6 April.
According to the ICO, over 800 data security breaches have been reported in the past two years.
A further 100 organisations have reported data security breaches in the past two months, said David Smith, deputy information commissioner.
"We are keen to work with organisations to prevent breaches occurring in the first place and to help put things right when things do go wrong," he said.
The ICO provides free advice to organisations to help them comply with the Data Protection Act.
Smith said although talking to the ICO may results in regulatory action, organisations must act responsibly.
"Those that try to cover up breaches which we subsequently become aware of are likely to face tougher regulatory sanctions," he said.