The RAC Foundation has warned that motorists who fail to change their driving licence details after moving home could be facing combined fines of almost £1 billion.
As many as 19% of all licences are thought to carry incorrect address details, meaning that some 7.9 million drivers are facing fines of up to £1,000 each, according to latest government figures.
Under current laws, people are required to send details of their new address to the Driver and Vehicle Licensing Agency (DVLA) when they move.
Professor Stephen Glaister, director of the RAC Foundation said that the figures indicate that the system is not working effectively.
"We would urge all drivers to comply with the law and inform DVLA of their change in circumstances," he said. "Drivers should also be aware that incorrect paperwork might invalidate their insurance.
"It seems many drivers simply don't know they are in breach of the law and even if they are aware of the requirements they might not be able to find the vital paper counterpart to their photocard licences which is needed to complete the process."
Professor Glaister urged the agency to cross reference motorists' address information with vehicle records, which he said are 97% accurate.
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