Post Office has denied that it is abusing its position as a monopoly provider of car tax to gain an unfair advantage in its insurance offering.
The organisation responded to criticism that it was abusing its position with reassurances that no information gathered in the sale of car tax was used to sell insurance.
Post Office Financial Services head of marketing Mike Smith said: "Under the requirements of the Data Protection Act, the Post Office is not allowed to use data obtained from the car tax transaction for other purposes and our frontline people have been trained to ensure they comply with these regulations.
"We do not use information passed to us by our customers unless they authorise us to do so - for instance, by a customer completing a 'win a car' competition form which is part of our marketing effort to launch motor insurance.
"This is very different from us acquiring details from their car tax renewal forms, which would clearly breach data protection regulations."
The Post Office motor insurance venture is operated through Budget's affinity arm Junction, which then places the business through a panel of insurers.
In a letter to Insurance Times last week, BH&S director Brian Sandland said: "We feel it [Post Office] is being allowed to obtain a competitive advantage due to its virtual monopoly in taxing motor vehicles under which the customer has to supply details of their insurance, such as renewal date and insurance company."
