Around 21 million pieces of data are given out by the Driver and Vehicle Licensing Agency (DVLA) each year, it has been revealed.
Of this, 1.2 million bits of information about drivers and vehicles were handed to private car parking companies, the House of Commons Transport Committee has been told.
Labour MP Graham Stringer said: "Some of these parking companies are pretty close to the edge of legality. Some are pretty dodgy characters."
But DVLA chief executive Simon Tse assured the committee that the DVLA only gave information to firms that had been approved by the British Parking Association.
Mr Tse also told MPs that 16.7 million pieces of information about vehicles and drivers were given to local authorities to assist in dealing with situations such as a car blocking an entrance.
The revelations came during talks over whether the DVLA should charge for releasing such information. Currently it charges £2.50 per request to cover administration costs.
DVLA chief executive Simon Tse said there had not been any significant losses from the agency's database, despite it coming under attack "frequently".
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