Secondary Courses

Saturday, February 11, 2006

This silicon.com (http://www.silicon.com) story has been sent to you by Martyn
Thomas

Message from sender:

The Government seems to suffer from an inability to do sums. Could it be that
the generation who took the new GCSEs has now reached the administrative level
in the Home Office?

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Government ID fraud claims - are they all they seem?

By Andy McCue

Government claims that identity fraud in the UK costs £1.7bn a year have been
exposed as inaccurate, with the real figure less than a third of that total, a
silicon.com investigation has found.

The Home Office claims ID fraud "puts a £1.7bn hole in Britain's pocket" but
many of the figures used to come to that amount either have little to do with
ID fraud or have been exaggerated.

The first misleading calculation is the inclusion of figures from card
payments body APACS totalling £504.8m. The number equates to the simple theft
of a credit or debit card as well as genuine ID fraud.

APACS spokesman Mark Bowerman told silicon.com that ID fraud actually cost
the payments industry just £36.9m in 2004 and that for the first six months
of 2005 it has actually dropped by 16 per cent, mainly due to the
introduction of chip and PIN.

He said APACS classes ID fraud as when someone's account is actually taken
over by a criminal or a new account is opened up using someone else's name.

"The Home Office's definition of ID fraud doesn't match our definition. We
class it as a more serious crime that involves a great deal more hassle than
just having your card stolen and having to phone up the bank to cancel it,"
he said.

Today's figures include a total of £395m for "money laundering" despite the
Home Office report admitting the overall size of money laundered in the UK is
not known and that "no figures are available currently on the proportion of
money laundering that relies on identity fraud".

Missing trader VAT fraud totalling £215m a year at HM Revenue and Customs
(HMRC) has also been included in the grand total by the Home Office. But a
HMRC spokeswoman told silicon.com that the figure was only "illustrative" as
it is difficult to put a value on the actual ID theft element of the
offence.

Another figure included by the Home Office is £1.73m for the Police Service,
despite an admission that "it is not possible to estimate the overall cost of
identity fraud to the Police Service". But the Home Office has decided that
the 15,000 to 20,000 days it takes police to deal with anyone they term a
'bogus caller' - such as conmen trying to gain entry to homes - can be
classed as identity fraud.

The cost of administering security and ID checks and combating fraud on
passport applicants by the UK Passport Service (£62.8m) is also included by
the Home Office, despite that being a preventative measure and not ID fraud
in itself.

When all these non-ID fraud figures are taken out of the Home Office
calculations the actual total annual cost of ID fraud to the UK is just
£494m, although £372m is an undefined figure given for losses due to ID fraud
across the telecoms industry.

A Home Office spokesman defended the figures. He said the exercise is not
about justifying the introduction of ID cards. He admitted the figures are
not an "exact science" and that the methodology has its limitations but said
the £1.7bn is still a "conservative estimate".

He said: "We do need a better way of looking at the cost of ID fraud but
these are still big numbers and no one would deny that it is a problem.
People do need to be more careful about looking after their personal
details." [...]