Identity Fraud Rises to New High
With criminals growing increasingly sophisticated and organized, identity fraud is once again on the rise, according to a survey released by Javelin Strategy & Research.
Javelin's annual survey shows that the number of identity fraud victims rose 12 percent to 11.1 million adults last year, and the value of the fraud has increased by 12.5 percent to $54 billion. That's the highest level since the survey was started in 2003.
"This is not a crime of individuals or petty thieves," said Michael Stanfield, CEO of Intersections, one of the survey's sponsors.
According to Stanfield, there is a increase in the number of crime rings — many often working out of Eastern European countries — who are using very organized methods of stealing personal information and using it to conduct identity fraud.
"Criminals are like water, they seek the easiest path," Stanfield said. "Right now, the easiest path is the American consumer, and to use the American consumer to steal information and steal financial resources."
The good news is: consumers are fighting back. According to the study, people are being more vigilant in detecting fraud and resolving it.
Average fraud resolution time dropped 30 percent to 21 hours, and nearly half of the new victims file police reports, which has resulted in double the reported arrests, triple the prosecutions and double the percentage of convictions in 2009, the study showed.
As encouraging as that may seem, experts believe the vast majority of security breaches go undetected.
That means consumers need to continue to be watchful for signs of fraud and take steps to protect themselves. There are many ways these thieves steal information, from malware that infects computers to so-called phishing scams that use fake Web sites to collect username and password information. Thieves also collect information from physical documents, including health insurance information, which is increasingly being targeted.
At the moment, account fraud is on the rise. This is where criminals open up new accounts with the information they steal. The study found that the number of new credit card accounts opened fraudulently rose 39 percent last year, new online accounts more than doubled, the number of new e-mail payment accounts rose 12 percent.
Thieves are also opening up new mobile phone accounts. About 29 percent of the victims surveyed by Javelin had had their information used for this purpose.
As for fraud on existing accounts, the vast majority of this occurs with credit card accounts, the study showed. This type of fraud was up 12 percent from 2008.
If you own a small business or are between the ages of 18 and 24 years old, you should be particularly watchful.
Since small business owners often use personal accounts for business, and they tend to make more transactions than the average adult, small business owners are experiencing fraud at one-and-a-half-times the rate of other adults.
Young adults, meanwhile, are slow to detect fraud and often take twice as many days to detect fraud. This is unfortunate as they are often in situations that put them at risk. For example, sharing computers, or using them in public settings.
The results of this study help drive home that consumers need to be more proactive about protecting themselves, detecting fraud and resolving it as quickly as possible.
Also, it stresses the need to protect your documents from prying eyes. At least 13 percent of all identity crimes last year were committed by someone previously known to the victim. Javelin said.
The Javelin Study, the nation's longest running study of identity fraud, was based on telephone interviews with more than 5,000 U.S. consumers conducted in November 2009. The study is co-sponsored by Fiserv, Intersections, Wells Fargo and the Identity Theft Assistance Center.
More from Consumer Nation:
- Big Chains Discover Small Is Really Big
- Can One Ad Change Everything for the Fragrance Industry
- Will Hilton Pay a Price for Not Being Loyal?
Questions? Comments? Email us at firstname.lastname@example.org