Very dangerous defrauding trend started in some hotels in krakow

No mention from UK Gov about major scams in Krakow -everything else is on the list

almost standard practice now to have one's passport photocopied

That doesn't make it legal in any way... private businesses should not own a xero copy of everyone's passports... they can be used in too many illegal ways :(

How can they be used, tell us?

To open up a bank account, sign up for a trading account, get a credit card issued.

You are most certainly not going to be able to open a bank account or get a credit card with only a photocopy of a passport. Especially not in Poland.

They use scanned copies of photo ID

Lots of US banks allow you to sign up online, without actually physically showing up. Right or wrong. They use scanned copies of photo ID to prove your identity. There's a bit more than a little gap in that verification process. All of the online brokerages do it the same way.

Delph & Harry - I'll tell you how you can open a bank account/credit cards with a Passport photocopy.
Say your PP photcopy falls into the hands of those organised gangs, somewhere in russia or ukraine or anywhere in the world as a matter of fact!
All they do is get a brand new fake passport with your details in it but with some one else's picture. Now, that is Identity thefty by definition. What they decide to use the fake passport for is any one's guess.

Here in the UK, i've known people who have accumulated huge debt bills and they haven't got a clue why they owe on credit cards and store cards.
Debit cards are a no go for these criminals because literally, you spend what you' ve got in bank not the credit. So yeah - In a nutshell, A passport photocopy, and any sort of proof of address is literally enough to have your identity stolen. However, you don't just find these criminals on the street, as they're running a multi-million pound 'business'

this is how these criminals start owning their own hotels in krakow

Say your PP photcopy falls into the hands of those organised gangs, somewhere in russia or ukraine or anywhere in the world as a matter of fact!
All they do is get a brand new fake passport with your details in it but with some one else's picture. Now, that is Identity thefty by definition. What they decide to use the fake passport for is any one's guess.

Here in the UK, i've known people who have accumulated huge debt bills and they haven't got a clue why they owe on credit cards and store cards.

Where do they get a brand new fake passport from?

many of these people have actually run up huge bills quite intentionally - often without the knowledge of the partner, who would understandably murder them.

However, i've also witnessed severe identity fraud cases. i know some one who has received a bank statement of an account he's never opened, and here's a surprise for you, it was £7000 overdrawn!

Not just clones a credit card and buys stuff until you notice, cancel the card, get your money back and they move onto someone else

Most of these debts are written off by the banks if the victims can prove beyond reasonable doubt that they weren't at fault.

You have that the wrong way round: the bank must write off the debt if they can not prove that the victim signed for each and every individual transaction.

if the victims can prove beyond reasonable doubt that they weren't at fault. Still, it's a horrible experience to go through.