LOUISVILLE, Ky. (February 9, 2009) – Identity theft rose by nearly 25 percent last year in the United States, according to a new report released today. The 2009 Identity Fraud Survey Report by Javelin Strategy & Research shows that the number of identity fraud victims increased 22 percent to 9.9 million people being hit, at a total cost of $48 billion.
According to James Van Dyke, president and founder of Javelin, this is the first year since the report began in 2004 that the numbers have gone up. “The industry was surprised at the whopping size of identity theft when it was first studied in the early part of the millennium, but it was beaten back strongly. But now, with the tough economy, criminals have become more desperate, and identity theft has gone up for the first time since we began tracking it,” Van Dyke says.
Even though the financial services industry has attacked identity theft and fraud, the bad news says is “Consumers are spending more time fixing identity fraud — an average of 30 hours per case,” Van Dyke says. “And institutions are losing customers because of it, because of ill will on the part of consumers.”
This is not good news for financial services. “In these cases where consumers spend all of this time, the impact is so dramatic because it is something they won’t ever forget,” he says. Van Dyke says that because of identity fraud, 15 percent of all customers leave their credit card provider, 17 percent leave their current bank or credit union, and 40 percent of people defrauded through a debit card get a new relationship.
One bright spot in the report is that with institutions doing more than ever, and the great industry efforts to stop fraud, this may be keeping the numbers from being even higher, he says.
Institutions need to be on the lookout for multi-channel crimes, and Van Dyke says vigilance should also be on low tech crimes, because they tend to have higher amounts taken. Even though there are more attacks being done electronically, the traditional low-tech crime still gets the criminal more money most of the time.
There are advantages of using technology to detect identity fraud, and Van Dyke says the common misperception that consumers don’t want to be involved in keeping their accounts secure is wrong. “Customers want more control, and institutions should offer tools to customers to check information, account information. Involve your customers in the security process,” he adds.
That is not to say that investing in back end fraud technology isn’t a good move, “But customers can be just as effective and help catch fraud, because one out of two fraud cases is first detected by the customer,” Van Dyke notes.
Some of the report’s key findings:
- Traditional ID Fraud Still High – Lost or stolen wallets, checkbooks and credit and debit cards are still the most likely avenues of fraudsters’ attacks.
- Criminals Moving Faster – In cases where identity fraud was reported, 71 percent of the fraud incidents began occurring in less than one week from when the data was first stolen, up from 33 percent in 2005.
- Cost to Consumer Going Down – The mean consumer cost of identity fraud decreased 31 percent from $718 to $496 per incident, its lowest level since 2005.
- Women Now Bigger Target – This year’s Identity Fraud Report finds that women are 26 percent more likely to be victims of identity fraud than men.
Source: Bank Information Security Articles