US identity theft continues to rise - Javelin
10 February 2010 | 9136 views | 0
The number of American identity fraud victims rose 12% last year to 11.1 million, with losses hitting $54 billion, according to an annual report from Javelin Strategy & Research.
The survey of 5000 US adults - sponsored by Wells Fargo, the Identity Theft Assistance Center, Fiserv and Intersections - shows the second consecutive rise in ID theft, leaving it at its highest rate since the report's first outing in 2003.
The number of fraudulent new credit card accounts increased to 39% of all identity fraud victims, up from 33% in 2008. New online accounts opened fraudulently more than doubled over the previous year, and the number of new e-mail payment accounts increased 12%. Thieves are also opening up new mobile phone accounts - 29% of the victims have had their information used for this purpose.
Javelin says this is in part due to the economic downturn but also cites the fact that fraudsters are becoming increasingly savvy with technology and are using personal information stolen in data breaches to open new accounts or to make changes to existing non-card accounts.
However, consumers are also using technology as a means to fight theft, monitoring their accounts more frequently online and through mobile alerts.
Meanwhile, banks are tackling the problem by providing more behind-the-scenes customer and analytic tools for safer electronic and traditional banking. They are investing in identity fraud monitoring, intelligent fraud engines to detect account access and payment anomalies, and resolution and education services, typically offering these services free to customers.
Consumers and businesses are also protecting data better and resolving fraud more quickly. Average fraud resolution time dropped 30% to 21 hours in 2009 and nearly half of new victims file police reports, resulting in double the reported arrests, triple the prosecutions, and double the percentage of convictions. In addition, victims who have their data stolen face average out-of-pocket loses of $373, down from $498 in 2008.
James Van Dyke, president, Javelin, says: "The 2010 Identity Fraud Report shows that fraud increased for the second straight year and is at the highest rate since Javelin began this report in 2003. The good news is consumers are getting more aggressive in monitoring, detecting and preventing fraud with the help of technology and partnerships with financial institutions, government agencies and resolution services."