The paper files were contained in a briefcase that was stolen from an employee's locked car late on Wednesday evening. Halifax, which is the UK's biggest mortage lender, says it has begun writing to customers whose details were taken.

Around 1800 of the customer records contained names, addresses, mortgage account numbers and balance information, says Halifax. The majority of the remaining records including names, mortgage account numbers and approval status details.

Halifax says the employee uses this documented information when liaising with mortgage intermediaries.

The stolen data did not include any bank account details, PINs, passwords or details of financial transactions, says the bank, adding that it will continue to monitor the relevant accounts for suspicious activity and will keep customers informed of developments.

Shane O'Riordain, general manager, group communications, Hbos, says lessons have been learnt and the bank is reviewing procedure as a matter of urgency.

"It is almost impossible to use the stolen customer information for fraudulent purposes," says O'Riordain. "No customer will lose out in the very unlikely event of fraudulent activity on their account following this incident."

Halifax says the incident was promptly reported to all the relevant authorities, including the FSA.

The bank could face action from the City watchdog, which last month fined Nationwide £980,000 after a company laptop containing customer information was stolen from an employee's house. The building society was critised for not beginning an investigation until three weeks after the theft.

In a separate incident earlier this year Hbos said it was investigating how a customer who requested a copy of her bank statement ended up being sent the confidential details of 75,000 other account holders.

Stephanie McLaughlin, 22, asked Hbos for one copy of her bank statement but received five packages containing 2500 sheets containing other customers' names, sort codes and account details instead.