The prevalence and cost of financial crime resulting from identity theft is on the increase, according to the latest figures compiled by the US General Accounting Office.
Identity theft involves “stealing ” another person’s personal identifying information — such as Social Security number (SSN), date of birth, and mother’s maiden name — and then using the information to fraudulently establish credit, run up debt, or take over existing financial accounts. Due partly to the growth of the Internet and other communications technologies, there is general consensus that the opportunities for identity theft are not likely to decline.
This report provides information on:
* the extent or prevalence of identity theft;
* the cost of identity theft to the financial services industry, including direct fraud losses,staffing of fraud departments,and effect on consumer confidence in online commerce;
* the cost of identity theft to victims,including victim productivity losses, out-of-pocket expenses, and cost of being denied credit; and
* the cost of identity theft to the federal criminal justice system.
Prevention efforts by financial institutions are particularly important, notes the GAO, given data showing that a large majority of consumer complaints regarding identity theft involve financial services — new credit card accounts opened, existing credit card accounts used, new deposit accounts opened, and newly obtained loans.
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