Report - Guardian

108 The LSE Identity Project Report: June 2005most members of the public most readily think of. It is dubious whether the introductionof UK identity cards will assist with the problem:- Identity cards could only assist if demanded at the point of transaction, but thisalmost never happens in the UK (and rarely in any other country for that matter).- Even if an identity card scheme was introduced and card was demanded at pointof transaction, verification would be impossible without the technologicalequipment giving access to the national identity register. It is highly unlikelythat ordinary traders would be granted such access, leaving them vulnerable tofake identity cards in the same was as they are now vulnerable to fake creditcards.- There are severe practical difficulties in checking identity with everycommercial transaction taking place in the UK today. Transaction times maywell become unacceptably slow, leading vendors to shun identity checking.- Increasing numbers of transactions are now take place online and it is notpossible for identity cards to be checked in these cases.For ordinary transactions, the identity card would have little or no impact for thepractical reasons just described. For extraordinary transactions, such as large purchases,it is already common practice for financial institutions to check with the genuine cardholder in case of credit card theft.Insurance industryThe Cabinet Office report claims that up to a quarter of all personal insurance fraud is adirect result of identity fraud, giving a figure of up to £250 million. The report admitsthat this estimate is difficult, so the figure used is already problematic and at the top endof the estimated range. Leaving the figure aside, the report does not make clear thelikely effect of an identity card on these losses.- To have any effect at all, identity cards would have to be required, not only atthe time of the proposal, but also with each subsequent claim. Identity is notcurrently required, the insured being subject in any event to a duty of uberrimaefidei.- UK identity cards would have no effect on that portion of insurance fraudcommitted by foreign nationals.- The insurance industry would need access to the national identity database forverification purposes and this is not currently planned.- The vast majority of insurance business is conducted at arm’s length, forexample over the Internet, thus precluding any opportunity to examine identitycards. The identity card serial number could be required and then cross-checked,but this would be open to abuse in much the same way as are credit cardnumbers. It is unlikely the insurance industry will change its business sourcingpractices simply to examine an identity card. Its business is risk, and theamounts lost through fraud would be insignificant in comparison to the amountsof lost business due to a requirement of face-to-face transactions and productionof identity cards, with its attendant inconvenience.