The cost of ID theft is soaring and the problem could be set to get worse. Andrew Partridge looks into the problem

Identity fraud is costing the UK £1.7bn a year, according to new statistics released by the Home Office.

The massive cost of the fraud is the equivalent to £35 for everybody in the country. And the Government figures show that the problem has got worse since 2002, when the problem cost the UK £1.3bn, £400m less than it does now.

ID fraudsters use personal details to steal someone’s identity to access their bank accounts and to run up debts in their name.

Home Office minister, Andy Burnham, says: “These findings confirm the sheer scale of the threat posed by identity fraud to individual citizens, private companies, and Government bodies alike.”

He warned that the problem could get worse due to the current lack of “high standard identification documentation”. He said: “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.”

The answer, he claims, is to introduce ID cards: “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.”

Yet critics slammed the use of the statistics by the Government. The Liberal Democrat’s Home Affairs spokesman, Alistair Carmichael MP, said the claims were just part of the Government’s drive to justify its plans to introduce ID cards.

He said: “On the one hand the Government’s figures are full of holes. On the other they are peddling claptrap about the effectiveness of an ID card in combating identity fraud.

He doubted that ID cards would reduce fraud unless people would be made to present their card every time they made a purchase.

He adds: “Putting all our personal data in one place will make the ID card scheme a honeypot for hackers and identity fraudsters. In other words, the ID card is likely to make the problem of identity fraud much worse, not better.”