Blagging goes beyond media firms - data watchdog
Routine hacking and blagging of personal data by financial services, debt collection and claims management companies is going untackled, the information commissioner has warned.
Christopher Graham said he feared the Leveson inquiry into phone hacking by newspapers would distract even more attention away from the problem.
He told MPs such offences had "the potential to wreck people's lives".
Ministers must act urgently to toughen sentencing for data breaches, he added.
Blagging is a breach of section 55 of the Data Protection Act and is defined as "knowingly or recklessly obtaining or disclosing personal data or information without the consent of the data controller".
Blagging addresses, phone bills, bank statements and health records has been illegal since 1994.
Giving evidence to the Commons Justice Committee, the information commissioner said his concerns about breaches of section 55 of the Data Protection Act went far beyond the media.
"My great concern about section 55 isn't really very much to do with the press," he said.
"[There is] lots and lots of evidence of section 55 being breached on quite a routine basis, but it's really about financial services, about debt collection, about claims management companies and [about] some worrying interference with the course of justice, perhaps attempted jury nobbling or witness tampering."
He said the current powers of fine - which on average amount to £100 per breach - were "no deterrent", and the government must enact section 77 and 78 of the 2008 Criminal Justice and Immigration Act which would give courts the power to impose custodial sentences instead.
But Mr Graham said he feared any effort to increase the punishments would be delayed by the Leveson inquiry into press behaviour.
"I'm very concerned this is now getting caught up in the reeds of the Leveson inquiry," he said.
"I'm now concerned that everything stops because of Lord Justice Leveson's inquiry and we cant get on with putting in place this very necessary deterrent.
"It just beggars belief that with more and more organisations having a right to our personal information, to access it, to process it, the courts don't have the full range of potential sentences to deal with an offence that can involve any of us.
"This isn't about celebrities' hospital appointments - this has the potential to wreck people's lives."