The Driving Vehicle and Licensing Agency is making money by selling driver details on to parking enforcement agencies.
The organisation made more than £10 million in the last year, selling the details of around 50,000 drivers every week – totalling 2.4 million in the last year.
The details have been used to pursue registered keepers of vehicles alleged to have contravened parking regulations. Often drivers are oblivious they have been caught until a fine drops through their letterbox, having been spotted on CCTV or through automatic numberplate recognition (ANPR) cameras.
The DVLA has been criticised for selling details to companies accused of using bullying and heavy-handed tactics to extract money from unwitting motorists.
Speaking to the Daily Mail, Graham Stringer, a Labour MP on the Commons Transport Select Committee, said: "I do think some of the firms buying the DVLA's information are crooks, and certainly in the past they have used violent and threatening behaviour, and I don't think that is the right thing for the DVLA to be doing.
"Even when firms are approved there is no proper way of examining them. This is wrong and improper use of people's private information."
20 less scrupulous companies were banned from accessing the database for three months in 2012, mainly due to breaches in the way fines should be issued.
Parking enforcement company Parking Eye is the DVLA's single biggest customer, spending £899,000 last year. Excel Parking Services, another to receive driver data from the DVLA, was exposed by the BBC's Watchdog program for unfair practices.
The biggest single user of the DVLA database is parking enforcement firm Parking Eye, which spent £899,000 last year. Another of the DVLA's customers, Excel Parking Services, was exposed last year by the BBC's Watchdog program for unfairly fining drivers.
A DVLA spokesman said: "Information is only provided under strict controls. If it is brought to our attention that a company does not meet necessary standards, we will investigate.
"If allegations are proven we will stop the release of keeper information to them. We do not make a profit on this service – the fee merely covers the cost of processing applications."