Latest figures show increase in identity theft and fraud
Identity fraud is costing the UK economy more than £1.7bn a year, according to figures published this month by the Home Office.
Identity fraud is costing the UK economy more than £1.7bn a year, according to figures published this month by the Home Office.
The figures, calculated by the Home Office Identity Fraud Steering Committee (IFSC) in co-operation with both public and private sector organisations, shows an increase on the £1.3bn 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. 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.
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.
The latest estimate of £1.7bn 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 organisations 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 the future.
Jack Wraith, Chief Executive of the Telecommunications UK 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 £370million. 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.
New figures from accountants KPMG have also highlighted a significant increase in the number of prosecutions for fraud. KPMGs Forensic Fraud Barometer indicates that there were 88 cases worth £249m in the first six months of 2005, compared with 134 cases worth £693m in the second half of the year.
One case, involving fraudulently acquired loans by metals trading company RBG Resources plc, was worth some £260m alone.
The Government remains the main victim of fraud (£447m), largely through attempts at tax evasion, VAT and benefits fraud, while fraud against financial institutions card fraud, identity fraud and false cheques has spiralled dramatically, up from £37m in 2004 to £360m in 2005.
A little under half of fraud was carried out by professional gangs (£420m), but even more was the result of insider fraud by management or company employees (£468m). The bulk of this was fraud by individuals at management level such as the medical centre practice manager who awarded himself some £400,000 in extra salary payments over a period of seven years.
Second-hand PCs are treasure trove for ID theft see P11