An email seen by The Press says City of York Council has reported itself to the Information Commissioner’s Office after the blunder.
The council launched a micro grant for businesses that were not eligible for support from the government scheme.
The email sent to some businesses who signed up for the scheme says: “We need to inform you that we have made an error in the processing of your micro business grant, which has resulted in sending your account and address details to another applicant.
“This did not contain any other security information and therefore we consider any risks are low.
“We have contacted the recipient and asked that they delete the email and have reported our error to the Information Commissioner”
The team apologises and says the breach will not affect payment of the grant.
One small business owner said they are “very grateful” for the grant but that their bank account had been blocked after the data breach and they had to spend two hours on the phone to their bank, before making a trip to the branch to sort it out.
They said: “It was a nightmare. When I checked it hadn’t gone in and the bank said a block had been applied to my account.
“This grant is all we could apply for and we are very grateful for it. But if there has been a leak of your data and you are not sure who has it, that is worrying.”
The council launched a £1m scheme to help businesses of one to 50 people, including self-employed people. The maximum grant available is £1,000.
The council has been approached for a comment.