The report builds on a study from 2002, which claimed that identity fraud was then costing the country £1.3 billion.
"These findings confirm the sheer scale of the threat posed by identity fraud to individual citizens, private companies, and Government bodies alike,” said Home Office Minister Andy Burnham, yesterday.
"One way we can reduce the potential for identity fraud is to introduce a national identity card, backed by a National Identity Register, using biometric technology to crack down on multiple identities and secure personal data on behalf of the individual,” he added.
The report was released just in time to fuel debate ahead of the return to the Commons of the ID Card Bill next week. However, the strategy appears to have backfired. The Home Office figures are being challenged.
It appears that the figure of £1.7 billion includes £395 million supposedly lost to ‘money laundering’ – a figure that the Home Office has now admitted is only ‘illustrative’.
It also includes £500 million supposedly lost as a result of “plastic cards being used by criminals pretending to be the rightful owner or by criminals using a fictitious identity.”
But payments association APACS, which supplied this figure, told Silicon.com that the total of £500 million includes losses incurred as a result of card theft and other offences that it considers to be separate from identity theft. The true figure for ID theft relating to credit and debit cards, said APACS, was just under £37 million.
"On the one hand the Government's figures are full of holes. On the other they are peddling claptrap about the effectiveness of an ID card in combating identity fraud,” warned Lib Dem Home Affairs spokesman Alistair Carmichael. "It is impossible to see how an ID card would reduce credit card fraud unless we are going to be expected to show our ID card every time we make a purchase."
Conservative spokesman Edward Garnier predicted that ID cards would increase the likelihood of identity theft.
“Instead of playing on people’s fears about ID fraud the Government should take the £15 billion the ID card system would cost and spend it on effective measures that will actually reduce fraud and combat terrorism,” he said.
According to Phil Booth, National Coordinator of campaign group NO2ID, “We hope that Parliament will look at these new figures very carefully. The minister doesn’t say exactly how biometric ID cards are supposed to prevent fraud, or how much. Do the Home Office intend us to be scanned or fingerprinted wherever we go?”
“Andy Burnham’s assertion that biometrics will prevent criminals registering multiple identities have already been contradicted by the head of the ID card programme, who was reported as saying that – due to difficulties with ‘one-to-many’ matching – criminals will merely have to work hard to get two identities and work very hard to get three,” he added.
On Wednesday the group issued a warning that the security of the Dutch biometric passport, which uses the same RFID technology as intended for UK ID cards, has been cracked using data 'skimmed' from a distance of around 10 metres.
"Identity fraud will be made much worse by ID cards, not better,” said Booth. “Numbering and indexing every person in the country on a huge central Register, then making us use cards designed to broadcast not only this number but our personal data, including our biometrics, will be an absolute bonanza for identity thieves and fraudsters."
