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Personal data of thousands of construction workers could be at risk after a firm was accused of selling data without their consent or knowledge.

A raid on a firm known as the Consulting Association, in the West Midlands, by the Information Commissioner’s Office (ICO) revealed a database of builders run for over 15 years containing "sensitive personal information" including workers' personal relationships, trade union activity and employment history.

At the time of the raid details of 3,213 construction workers were on the database.

The firm sold information – as a vetting service – to a number of construction firms for an annual fee of £3,000.

It is reported the database was a 'blacklist' of employees and the ICO says major names in construction including Balfour Beatty, Sir Robert McAlpine, Taylor Woodrow, Skanska and Costain had at times used the service.

Deputy information commissioner David Smith said: "This is a serious breach of the Data Protection Act.

"Not only was personal information held on individuals without their knowledge or consent but the very existence of the database was repeatedly denied.

"The covert system enabled Mr Kerr to unlawfully trade personal information on workers for many years helping the construction industry to vet prospective employees."

The ICO has now served an Enforcement Notice ordering the man behind the firm, Ian Kerr, to stop using the system.

Mr Kerr is to cease trading by the end of this week and he now faces prosecution by the ICO for breaching the Data Protection Act.

He told the Guardian that was not running a blacklist.

Mr Smith said: "The Data Protection Act clearly states that organisations must be open about how they process personal information.

"We will prosecute Mr Kerr and we are also considering what regulatory action to take against construction firms who have been using the system."

He added: "Trading people’s personal details in this way is unlawful and we are determined to stamp out this type of activity."