The UK government’s Driver and Vehicle Licensing Agency (DVLA) has launched an investigation into how the car registration details of millions of motorists were sold for use in an advertising campaign by a giant oil company.

Castrol spent hundreds of thousands of pounds on a campaign launched a week ago to promote its oils, using giant advertising billboards on five major routes into London. The system used roadside cameras to capture number plate details, interrogated the DVLA data to obtain the vehicle make and model and then displayed the recommended grade of oil as the car drove by.

But the campaign – originally scheduled to run for two weeks – was stopped on Thursday by the DVLA after inquiries by the Mail on Sunday newspaper. The government agency is now investigating how Castrol obtained the data believed to have contained most of the 34m vehicle owner details held by the DVLA. The agency has been criticised recently for allowing access to its data by the likes of private car park operators seeking vehicle ownership details so they can impose parking ‘fines’, such as for overstaying the limit in a supermarket car park.

The data Castrol used identified the make, year, engine size and model of vehicle, enabling the billboards to to specify the lubricant suitable for each car.

The issue is a further embarrassment for the DVLA and has again raised questions about how highly sensitive drivers’ information is handled by the agency.

The Mail on Sunday had previously revealed the agency was selling motorists’ names and home addresses to convicted criminals. In the past five years, it has received GBP15m (US$16.3m) from selling the names and addresses of more than 6m motorists.

The DVLA said it restricts the release of data chiefly to car parking enforcement companies, solicitors, finance firms and property companies – but insists that the privacy of motorists is ‘properly safeguarded’.

However, the Mail on Sunday said it sell datas, including the registration number, engine size, year, make and model of individual cars, to a number of organisations, including five motor industry data providers.

This is used to ensure repairers fit vehicles with the correct tyres, batteries and replacement parts. But sources admitted that in the Castrol campaign, the DVLA data was passed on by one of the five companies to a third party contractor, which then used it in contravention of the ban on the use of registration numbers for marketing purposes.

Both the DVLA and Castrol have refused to identify the data firm while the official inquiry is being carried out.

A DVLA spokesman said: “We have not provided any vehicle information to Castrol or received any fee from them in relation to their campaign. As soon as we became aware that vehicle information had been used inappropriately we contacted the organisation concerned to ensure this was stopped and are urgently investigating the case.”

Castrol’s UK & Ireland marketing director, Chris Sedgwick, said in a statement: “Castrol conducted a digital billboard campaign, displaying recommended lubricants for cars passing the billboards, as a short-term extension to a long-term service we have been running by web and text for a number of years.

“We believed the trial was entirely in line with the service provided by our data supplier, however, after being alerted to an issue over the use of the DVLA data, we immediately ceased the interactive trial pending a review as we would never compromise the DVLA’s data.

“Castrol does not have direct access to DVLA data; we supply lubricant information to our data suppliers who match this with vehicle details derived from DVLA data.”