Study: Identity fraud is on the upswing, but per incident rate is dropping


The bad news is that the number of identity fraud victims in 2008 increased 22%, encompassing 9.9 million U.S. adults. The good news is that because consumers and businesses are detecting and resolving fraud more quickly, consumer costs dropped from $718 to $496 per incident in 2008, a 31% decrease. The 2009 Identity Fraud Survey Report, which was conducted by Javelin Strategy & Research, also found that most compromised data is due to low-tech methods, such as lost or stolen wallets, checkbooks, and credit and debit cards. One other notable trend was that women were 26% more likely to be victims than men in 2008, and this is attributed to women making more in-person purchases. Also noteworthy is that 14% of the female victims experienced a lag time of one year or more before their data was compromised.
Experts suggest the following six steps to prevent identity fraud:
1.Be Vigilant – Monitor your accounts regularly online at bank and credit card websites, ATMs or by phone and set up alerts that can be sent both online and to a mobile device.
2.Keep Personal Data Private — Do not provide Social Security Numbers, passwords, PINs or account numbers by phone or online unless you initiated the interaction to a verified and trusted location.
3.Online is Safer Than Offline – Paperless transactions that are conducted in a secure online environment (keep browsers, anti-virus and anti-spyware software updated) reduce the potential for fraud. Instead of paper invoices, statements and checks, replace them with electronic versions.
4.Be Aware of Those Around You — Be alert to those around you when giving out financial information over the phone or by text. Note that more than 10 percent of victims knew their fraud perpetrator.
5.Ensure Credit and Debit Cards are Protected — Obtain credit and debit cards from financial institutions that provide zero liability if a card is ever lost, stolen or used without authorization.
6.Learn About Identity Protection Services — At a minimum, consumers should review their credit report no less than once per year, either for free at AnnualCreditReport.com or through many financial institutions’ websites.
Identity Theft Insurance
The National Association of Insurance Commissioners has a Consumer Alert about Identity Theft Insurance, noting that while policies are available, they do not protect you from becoming a victim of identity theft and do not cover direct monetary losses incurred as result of identity theft. Rather, they insure you for any costs that might be incurred in reclaiming your identity, such as hiring an attorney, taking time from work, and any administrative costs such as the cost of phone calls or postage. Before purchasing, NAIC recommends checking with your current Homeowners policy to see if it already includes such coverage. If not, NAIC offers suggestions for things to consider before you purchase.
For more resources on identity fraud, see the Federal Trade Commission’s Identity Theft Site.