The government is working on "possible amendments" to data rules
Councils have said they are "more than happy" to stop selling voters' details to companies, after a report condemned the practice.
The government-commissioned review said providing electoral roll information to marketing firms gave a "poor message".
But the Local Government Association told the BBC it was "no skin off our noses" to stop, as the practice was "fiddly" and made "very little money".
Individuals can ask councils not to pass on their details to firms.
The review, headed up by Information Commissioner Richard Thomas and Wellcome Trust director Dr Mark Walport, was commissioned a week before HM Revenue and Customs lost two discs containing personal details of 25 million people.
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It said people should have a right to know with whom companies shared their details and those deliberately breaking privacy rules should face large fines.
Across the public and private sectors, data-sharing was "shrouded in confusion" and the public had little insight into how personal information was used, the report said.
Mr Thomas said he was concerned about the practice of councils selling on "edited" versions of the electoral roll - from which people can opt out - which were often used by direct marketing companies.
"We feel that selling the edited register is an unsatisfactory way for local authorities to treat personal information," he said.
"It sends a particularly poor message to the public that personal information collected for something as vital as participation in the democratic process can be sold to anyone for any purpose."
But LGA spokesman Edward Welsh, told BBC Radio 4's World at One that councils made "very little money" from selling the edited register to direct marketing companies.
He said: "We reckon something around £5 per thousand names and, quite frankly, most councils would be more than happy to stop doing this.
"It's no skin off our noses to stop running two registers. It's difficult, and fiddly.
"And, quite frankly, the only reason we do it is because the government forced us to so when they changed the rules in 2002."
A Ministry of Justice spokeswoman said: "We agree that measures need to be taken to increase public trust and confidence in the handling and processing of personal data by the public and private sectors."
She said that the government was working on "possible amendments" to the information commissioner's powers and funding arrangements.
"We will assess the other recommendations in the report in further detail and issue a more detailed statement once we have had time to fully consider the implications and costs of bringing about such changes," she added.