People are warned to be more cautious with bank slips

It also suggests buying a home shredder to destroy documents like credit card applications, in case they fall into the wrong hands.

In its report, the Fraud Advisory Panel argues that identity theft is such a serious problem that the government should allow the public sector and private firms to share data so they can protect themselves.

The crime can involve everything from the use of someone's identity to apply for loans, to taking over the victim's bank account or even obtaining passports and other documents in their name.

Stolen passports

The panel, which includes representatives from the police as well as the financial services, called on ministers to do more against identity crime.

Steven Philippsohn, of the panel's Cybercrime working group, said: "We believe the government should clarify through legal means those situations in which data-sharing between public sector and business organisations will be permitted."

Derek Bond was held in a South African jail for nearly three weeks

Allowing cross-referencing of information on known fraudsters would help to track them down at an earlier stage, he said.

For example, if someone was using a stolen passport as proof of identity to take out a credit card or loan, the bank would be alerted through a shared database.

Mr Philippsohn said: "Fear of the regulators swooping down is hindering attempts to reduce fraud by means of data-sharing."

Bogus websites

The report also highlights online identity fraud as a major problem.

Bogus websites which look like those run by well-known names can glean personal bank account details, it said.

The Credit Industry Fraud Avoidance System says identity fraud cases have increased dramatically - from 27,270 cases in 2001 to 42,029 in 2002.

Among the most famous cases was that of British pensioner Derek Bond, who spent nearly three weeks in a South African jail after a suspected American criminal used his identity.