The majority of the lost data was neither encrypted nor protected by a password, according to the ITRC's report.

It documents 656 breaches in 2008 from a range of well-known U.S. companies and government entities, compared to 446 breaches in 2007, a 47 percent increase. Information about the breaches was collected by tracking media reports and the disclosures companies are required to make by law.

Data breach notification laws vary by state. Some companies do not reveal the number of data records that have been affected, which means the actual number of data breaches is likely much more than 35 million.

"More companies are revealing that they have had a data breach, either due to laws or public pressure," the ITRC wrote on its Web site. "Our sense is that two things are happening—the criminal population is stealing more data from companies and that we are hearing more about the breaches."

The data breaches came from a variety of mishaps, including theft of laptops, hacking, employees improperly handling data, accidental disclosure and problems with subcontractors.

BNY Mellon Shareowner Services, an investment bank based in New Jersey, reported the highest number of breached records: 12.5 million. A box of computer tapes containing names, Social Security and account numbers was lost in February 2008. A lock on the truck transporting the tapes was broken, and the truck had been left unattended, according to news reports. The tapes were not encrypted.

The business community had the most breaches, comprising more than a third of the 656 breaches, ITRC said. Government and military organizations came in at 16.8 percent, the second-highest tally. However, that's an improvement over 2006, when that sector comprised nearly 30 percent of all reported data breaches, the center said.

Some 15.7 percent of all breaches were attributed to insider theft, a figure that more than doubled between 2007 and 2008, ITRC said.