Identity theft costs U.K. £1.7bn every year

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New figures from the Home Office have claimed identity fraud costs the U.K. more than £1.7 billion a year.

This total, calculated by the Home Office Identity Fraud Steering Committee (IFSC) in cooperation with both public and private sector organizations, shows an increase on the £1.3 billion cost of identity fraud identified by the 2002 Cabinet Office report, Identity Fraud: a Study.

Home Office Minister Andy Burnham said: "These findings confirm the sheer scale of the threat posed by identity fraud to individual citizens, private companies, and government bodies alike.

"Proving identity is an intrinsic part of life in modern societies. But our current reliance on documents such as birth certificates, utility bills and bank statements to prove who we are leaves an open door to identity criminals."

Burnham went on to argue that the government's controversial plans to introduce biometric-based ID cards in the U.K. would help cut down on identity theft.

"At the same time we are building on international moves towards incorporating biometrics in travel documents to enhance the security of the British passport. And we will continue to work with law enforcement agencies, private and public sector organisations on practical initiatives to tackle identity crime," added Burnham.

The Criminal Justice Act of 2003 changed the law to align the penalty for fraudulently obtaining a driving license with that for fraudulently obtaining a passport and made these offences arrestable. Obtaining either document fraudulently now incurs a maximum penalty of two years imprisonment. The Identity Cards Bill includes a new offence of possessing or controlling false identity documents, which would provide the police with the means to disrupt the activities of organised criminals at an earlier stage of their activities.

The latest estimate of £1.7 billion has been produced as a one-off exercise using the same methodology as the 2002 Cabinet Office Study to establish trends. It comprises the cost to a wide range of organizations in both the public and private sectors but with more up-to-date figures where these are available, including for the first time figures for the cost of identity fraud for the telecommunications industry. The IFSC is engaged in ongoing work to provide an even clearer picture of the extent of identity fraud in future.

Jack Wraith, chief executive of the Telecommunications U.K. Fraud Forum, said: "The very nature of the services provided by the telecommunications industry makes us a target for identity fraud. Figures available for 2004 would suggest that the loss, in respect to identity fraud, was in the region of £370 million. The industry is pleased to work with the Home Office and other industries in combating this problem which, with the advent of modern telecommunications, is a growing problem for everyone."

The Home Office, in collaboration with other government departments and private sector organizations, set up the IFSC to lead a cross public/private sector work program to tackle identity theft and identity fraud. The program co-ordinates existing activity in the public and private sectors and identifies new projects and initiatives to reduce identity crime.

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