Identity fraud incidents increased
by more than 1 million victims and fraudsters stole more than $21 billion in
2012, the highest amount since 2009, according to Javelin Strategy &
Research.
The study found 12.6 million
victims of identity fraud in the United States in the past year, which equates
to one victim every three seconds. The report also found that nearly one in four
data breach letter recipients became a victim of identity fraud, with breaches
involving Social Security numbers to be the most damaging.
Over the past year, companies are
responding more quickly which means a consumer's information is being misused
for fewer days than ever before, and the mean cost per victim has been
flattening.
Identity Fraud Rate Rose in 2012
Identity fraud is defined as the
unauthorized use of another person's personal information to achieve illicit
financial gain. Identity fraud can range from simply using a stolen payment
card account, to making a fraudulent purchase, to taking control of existing
accounts or opening new accounts, including mobile phone or utility services.
In October 2012, Javelin Strategy
& Research conducted an address-based survey of 5,249 U.S. consumers to
identify important findings about the impact of fraud, uncover areas of
progress and identify areas in which consumers must exercise continued
vigilance.
"This past year was one where there
were both successes and setbacks for consumers, institutions and fraudsters,"
says Jim Van Dyke, CEO of Javelin Strategy & Research. "Consumers and
institutions are now starting to act as partners-detecting and stopping fraud
faster than ever before. But fraudsters are acting quicker than ever before and
victimizing more consumers. Consumers must take data breach notifications more
seriously and maintain vigilance to safeguard personal information, especially
Social Security numbers."
The study found several significant
identity fraud trends:
· Identity fraud incidents and amount stolen
increased-the number of identity fraud incidents increased by 1 million more
consumers over the past year, and the dollar amount stolen increased to $21
billion, a three-year high but still significantly lower than the all-time high
of $47 billion in 2004.
· Consumers who had their Social Security number
compromised in a data breach were five times more likely to be a fraud victim
than an average consumer.
· Fraudsters misuse information fewer days than
before-consumer information was misused for an average of 48 days in 2012, down
from 55 days in 2011 and 95 days in 2010.
· Misuse time was down for all types of fraud
including fraud on cards, loans, bank accounts, mobile phone bills, and other
types of fraud due to consumer and industry action. More than 50% of victims
were actively detecting fraud using financial alerts, credit monitoring or
identity protection services, and by monitoring their accounts.
· Small retailers are losing out-fraud victims are
more selective where they shop after an incident, and small businesses were the
most dramatically impacted. The study found that 15% of all fraud victims decided
to change behaviors and avoid smaller online merchants.
· The personal information lost in data breaches
are frequently used to commit fraud. While credit card numbers remain the most
popular item revealed in a data breach, in reality other information can be
more useful to fraudsters. Personal information such as online banking login,
user name, and password were compromised in 10% of incidents and 16% of
incidents included Social Security numbers. Recipients need to take data breach
letters seriously and protect themselves by enrolling in identity protection
services and taking other steps.
· It's not just online fraud or data breaches.
More than 1.5 million consumers were victims of familiar fraud, which is fraud
when victims know the fraudster. Lower income consumers were more likely to be
victims of familiar fraud. The information most likely to be taken via familiar
fraud includes name, Social Security number, address, and checking account
numbers.
· Encouragingly, consumers, financial institutions,
and identity protection services are working closely together and that is
having a positive impact. In 33% of cases, consumers were notified of the fraud
by a bank or card issuer. Email and other proactive alerts can help consumers
discover and stop identity fraud more quickly. Consumers must retain vigilance
as 50% found the fraud themselves by monitoring their bank accounts,
statements, credit scores, and purchasing identity protection services. When
reported in a timely manner, costs can be kept down.
https://www.javelinstrategy.com/news/1387/92/More-Than-12-Million-Identity-Fraud-Victims-in-2012-According-to-Latest-Javelin-Strategy-Research-Report/d,pressRoomDetail
[This article was posted on March 6, 2013, on the website of ABA
Banking Journal, www.ababj.com.]
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