Having something like their slot ID would be a bit easier to remember - but then again the same thing happens. They will just say: Oh, Civ 23 or 1093292393 was selling drugs, go get him.
It may need to become a police procedure to not act on 'illegal' evidence i.e. search on the info of their name, rather than their clothing/looks.
While this fixes some of it, it certainly doesn't fix the civ on civ issues.
From a medic perspective, we could do without names above their head, but direct text chat should still show their names and any dead people would also need a name so we can make sure which faction they belong to if the clothing is not showing, and if someone tells us not to revive person X, we should know who he is rather than jumping through 5 dead bodies asking if its this one... However, a medics name should be visible to all as to not confuse anyone.
It really just comes down to pros and cons. Is it more beneficial to have the names so that they can be reported easier, or is RP more important?