Report - Guardian

The LSE Identity Project Report: June 2005 109On balance, for practical reasons the identity card is unlikely to have an effect on theamount of losses due to insurance fraud.CIFAS, the UK Fraud Prevention ServiceCIFAS reports that false identity or victim impersonation fraud accounted for £62.5million of losses during 2000/1. However, one analysis 291 notes that identity cards haveno relevance to much of this type of fraud:- ‘Dumpster diving’ forms a significant part of this problem, where personal datacontained in papers which have been thrown away are stolen from dustbinsoutside homes and offices. Such personal data can then be used by the thief togain goods and services. As justification for the introduction of identity cards,the Home Office points out in its most recent briefing that “A few items stolenfrom a rubbish bin such as utility bills and credit card statements can lead tohuge financial losses as well as distress and inconvenience for victims in puttingtheir records straight.” 292 However, identity cards have no relevance here, unlessthey are checked at the point of a transaction based on stolen documents which,as argued above, is unlikely to happen. The Home Office’s own justification isconfusing.- A related problem is theft of mail, particularly invitations from credit cardcompanies, from communal entrance halls. The thief can then apply for thecredit card using the details contained in the mail shot. For the same reasons asabove, identity cards would not assist with this problem.- Any fraudulent transaction which takes place at arm’s length, for example overthe Internet, will not be scotched by an identity card.- Although some of the quoted £62.5 million of losses may be addressed byidentity cards, it is likely that the majority of it will not because it is not feasiblefor identity cards to be demanded and then verified with each commercialtransaction.In summary, the only category of identity fraud cited by the Cabinet Office report onwhich identity cards may have a significant impact is the welfare fraud estimated to costthe Department of Work and Pensions £35 million a year. However, in the“Government’s Reply to the Fourth Report from the Home Affairs Committee” 293 thegovernment states that the DWP already has robust identity procedures in place andidentity cards would be used “to maintain or even enhance that level of security”. Thissuggests that identity cards are hardly even necessary here. When compared to theGovernment’s claims of £1.3 billion, all this questions the Government’s strategy forrelying on identity fraud as the basis for identity cards. The identity cards scheme isprojected to cost billions, and it does not appear to be a proportionate response whencareful consideration is given to the limited ways in which it might assist.291 ‘UK ID scheme rides again, as biggest ID fraud of them all’, John Lettice, 25 May 2005www.theregister.co.uk/2005/05/25/id_bill_mk2_fraud_con/html292 Home Office Identity Cards Briefing, May 2005 http://www.homeoffice.gov.uk/docs4/Id_Cards_Briefing.pdf293 October 2004, Session 2003-4 HC 130