Identity fraud affects 1.8 million Britons every year, costing £2.7bn in the process, researcher claimed today.

A study by the National Fraud Authority - published on Monday at the start of identity fraud prevention week - found that fraudsters gain by more than £1,000 from every stolen identity. Stolen credentials are used to pay for goods and obtain lines of credit. Fraudulent benefit applications under false names have also become a way to make a dishonest living.

Ultimately the general public pays for the crime in the form of higher fees to banks as well as higher taxes.

Dr Bernard Herdan, chief executive of the National Fraud Authority, commented: "Stolen and false identities are a significant enabler of crime and this issue demands a co-ordinated response across government and the private sector."

"The work we've undertaken has allowed us to gain a better understanding of the issue of identity crime. We are now working actively with our partners to improve the UK's response to identity-related crime and help reduce its devastating impact," he added.

Victims are faced with the chore of repairing the damage to their financial standing caused by incidents of identity theft, a process that can take up to 200 hours.

NFA has teamed up with Action Fraud to draw up a useful check-list of steps that can be taken to minimise incidents of fraud, including shredding potentially sensitive documents such as utility bills and financial statements. Obtaining regular statements from credit reference agencies is also recommend. On the PC and internet front, applying privacy settings and restriction the information you upload onto social networking sites is highly recommended. Surfers should also use up-to-date anti-virus software. ®