ID Fraud Figures – dodgy or what?
A quick look at the Home Office ID Fraud estimate breakdown shows it to be somewhat nonsensical.
The most amusing part of it has to be that they have included the costs to the passport office of taking “measures to counter identity
fraud when processing applications for UK passports
issued in the UK” -does this mean that when they roll out figures like this after the introduction of an ID scheme we can assume the cost to the nation of ID fraud will be up at least £5bn. Hope none of these Home Office guys are on performance related bonuses!
Looking at the rest of the figures, once more we have most credit card fraud being counted (including card-not present) as ID fraud, which is silly, but adds a handy half billion to the figure.
There is also a strange near quarter billion on “Indirect Taxation” – no clue what they mean by that.
£395m goes down to money laundering – is that the same as Identity Fraud?
And another £372m down to “Telecommunications” with an assertion that “The cost of identity-related fraud is a substantial component of the total fraud/revenue loss in the telecoms sector.” Really?
We have heard of creative accounting, but this is just ridiculous. Would any of us get away with these shenanigans on our tax returns? Gordon?
Update: Silicon.com has done some more research showing the figures to be embarrasingly false. When confronted with this:
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”.
Nice bit of doublethink – when accused of exageration respond with “on the contrary, I am understating the problem”.
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.”
Quite – people should be careful about the government stealing their identities, then selling them back.
February 2nd, 2006 at 18:24
The big chnk inder onderct taxation is the Missing Trader Inter Community fraud o.e. VAT scams involving VAT refunds within the European Union.
This is one of the figures which even the document admits is just a repeat of the 2002 figures, and that there is no idea of how much , if any, is due to “identity fraud”.
ALl the cost estimates (which can all be challenged) regarding existing enforcement costs, are for fixed overheads, which would remain after the introoduction of the ID Card scheme.
As you rightly point out, ID Fraud will increas by the cot of the whole ID Card scheme if this stupid fiddling with the figures is repeated if the scheme is introduced.
A good question for the next time anyone meets Andy Burnham would be:
Will you resign, if this 2002 / 2006 cost estimate is repeated once once the ID Card scheme starts to roll out, and the figures show an increase in “identity fraud” costs ?
No wonder they have been resisting the National AUdit Office getting a look at the ID Card scheme cost / benefit analysis, if it is as shoddy as these figures are.
Where are the actual crime statistics for “identity fraud ” cases ? How many criminals, how many victims, how much was actually stolen ?
Andy Burnham is in charge of Home Office research, why did he not commission a proper scientific quantitative study ?
February 2nd, 2006 at 18:26
Eeek
“big chnk inder onderct” = “big chunk under indirect”
February 2nd, 2006 at 18:36
Thanks for clarifying that wtwu.
It would be nice if the government actually came out and defined what “identity fraud” was, and perhaps went so far as to make it a crime since it is so costly and scary.
Spyblog has the 2002 breakdown of “identity fraud” cost to the nation, and some good discussion.
February 3rd, 2006 at 10:29
My favourite entry was this for the passport service of £62.8m to cover:
“The cost to UKPS of measures to counter identity
fraud when processing applications for UK passports issued in the UK.”
… isn’t that what the passport service *is for* in the first place? It certainly not what I’d call fraud.
February 3rd, 2006 at 13:47
PS, might the magic new 372m on telecommunications fraud actually be a partial double count of the credit card fraud figure?
The “substantial portion” language seems to imply 372m is too big anyway.
February 4th, 2006 at 18:25
Including credit card fraud at all is on shaky ground. Naturally, all CnP fraud will be utterly untouched by ID Cards, unless and until we get to the Police State of “Please enter/quote your National ID Number to make this purchase” for *all* remote purchases. Which of course is devastatingly insecure, as per SSID in the US.
Of the rest, I’ve *never* been asked to prove my identity when paying in person by CC (except for goods/services which *need* ID checking, when the ID element is for the goods/service, not the payment). HMG presumably hasn’t noticed a wee project which takes care of the vast majority of face to face CC fraud, finally coming into effect on Tuesday week.
February 4th, 2006 at 18:37
Looking at the table in detail, of the APACS figure:
Items i, ii and iv will be taken care of by Chip & PIN.
iii won’t be touched by ID Cards
v and vi may be improved by ID cards, but that’s only 7% of the claimed total, which I’d be very surprised to see 100% effectiveness in this. Other security measures being taken by most card-issuers will also reduce vi quite a bit – Egg already call to confirm unusual large transactions.
Nae doot we’ll be seeing the the Benefit Fraud Bogey being trotted out soon by the popular press (by, say, the still Labour supporting Sun). Let’s keep in mind the whopping £20m-£50m (woo) figure for identity-related benefit fraud for when that happens. That’s the size of saving that DWP recoups in a tactical project, barely mentioned in passing in a Commons written answer…