The Home Office has published (on a website called identitytheft.org.uk, rather than identitytheft.gov.uk, curiously), a set of figures which claim that Identity Theft costs the country £1.7bn a year, a figure which is then happily used to imply ID cards would save this amount. But after a read of the report produced, the only fitting response can be a resounding “Bollocks!”

The “detailed breakdown” [PDF] is nothing of the sort; it’s merely a 4-page table of figures with the most cursory explanations for each component. The largest amount, £504.8m, is attributed to APACS-related fraud - i.e. people using debit and credit cards that don’t belong to them. The vast majority of crime committed thus is because the numbers are obtained by theft, skimming, or using discarded receipts and records; transactions are then done online or in a shop - i.e. in places where the debit/credit card is the primary means of identification, and a government-issued identity card would not normally be used. Having been a victim of this kind of fraud myself, I know full well that possession of an ID card would have made no difference to whether I’d been robbed or not. Only £36.9m of this sum can be down to fraudulent application or account takeover - circumstances where another means of identification is involved.

Next up is money laundering, which takes up £395m, but would this all be prevented by identity cards? Money laundering is a complex international activity, that is perpetrated through obfuscation, mixing legitimate with illegitimate money, with bank accounts and front companies all over the world. Cracking money laundering is going to take more than demanding everyone in the UK carrying a card and getting blipped every time we leave the house - most of the transactions involved will be well away from the government’s biometric readers and all-knowing register. Even the report itself admits: “No figures are available currently on the proportion of money laundering that relies on identity fraud”.

Also cited is a £372m loss by the telecommunications industry. This is a substantial figure, but there are absolutely no details on how this is broken down - does this include fraudulent payment of bills with other people’s credit and debit cards (in which case it is already included above and should not be double-counted). What percentage of it is mobile phone cloning and the like - another fraud that ID cards cannot combat. Does the definition of “identity fraud” extend to bog-standard nicking someone’s phone and using it? No details are forthcoming.

Another £215m is claimed for MTIC fraud (i.e. fiddling your VAT returns), but the demands in combatting this crime are more matters of auditing and detection; ID cards may help with background checks during VAT registration, but as in terrorism, you will always be able to find people with completely “clean” backgrounds who will slip through the net. Indeed, a 2003 government speech outlining anti-MTIC policy makes no mention of ID cards as a tactic to combat it, preferring instead a diverse set of approaches, including stepping up policing and intelligence and making better analysis of existing data.

The majority of the £1.487bn that these parts total will not be saved by identity cards; certainly not identity cards alone. Out of the remaining costs, most of which are borne by the state, there are some risible claims - the UK Passport Service spends £68m checking up on fraudulent applications, but this would not be saved with an alternative system; UKPS will have to spend the same money anyway to check up on fraudulent ID card applications (if not more - as an ID card would be a one-stop-identity shop, a successfully-obtained false ID would be worth a lot more and there could be more criminals trying to obtain one). In fact, the costs to the state of fraudulent identity, where compulsory provision of a card would definitely save money - unpaid fines, police time taken in checking suspects’ identities, social security fraud etc. runs to a hundred million, maybe two, at best. And plenty of that might be saved if the government tightened its own security procedures, as proven in the tax credit fraud fiasco.

In short then, the Home Office is desperate to prove that we will save the unknown number of billions an ID card system will cost us, so much so that they try to include every dubious reason they can think of with little explanation. The fact that this piss-poor, four page executive summary of an executive summary is what passes for a “detailed breakdown” suggests they’re being as obscure about the benefits as they are about the costs (which are always conveniently cloaked by the catch-all of commercial confidentiality). If this is the best they can do to demonstrate the worth of an identity card scheme, then it’s no wonder some of us are so sceptical about it.

Update: I didn’t know this when I wrote the post, but the NAO has condemned the Home Office’s accounts as slipshod and flawed (via Stumbling and Mumbling); perhaps they’re just incompetent then, rather than desperate.

More blogospheric goodness on the report - Curious Hamster with a bit of a Fisking, Devil’s Kitchen goes for the sweary approach.