US identity fraud plummets - Javelin
08 February 2011 | 12185 views | 1
The number of American identity fraud victims dropped by 28% to 8.1 million in 2010 with total losses also down $19 billion on the previous year, according to an annual report from Javelin Strategy & Research.
The survey of 5004 US adults, sponsored by Fiserv, Intersections and Wells Fargo, shows a three million fall in the number of victims from 11.1 million in 2009. Total annual fraud was down from $56 billion to $37 billion, an eight year low.
Javelin partially attributes the drop to the more stringent criteria financial institutions are applying to authenticate users and determine credit risk, as well as more Americans monitoring accounts online and using protection services that can provide updates to mobile devices.
The mean fraud amount per victim declined from $4,991 in 2009 to $4,607. One likely contributing factor was a significant drop in reported data breaches according to industry reports: 404 in 2010 with 26 million records exposed, compared to 604 in 2009 with 221 million records exposed.
However, while fraud incidents decreased, the mean consumer out-of-pocket cost due to identity fraud increased 63% from $387 in 2009 to $631 per incident in 2010. Javelin says this may be down to changes in the types of fraud perpetrated in 2010, including new account and debit card fraud.
New account fraud - in which accounts have been opened without the victim's knowledge - was responsible for the greatest fraud amount - $17 billion. Existing card fraud amounts declined by 38% from $23 billion in 2009 to $14 billion.
Friendly fraud - fraud perpetrated by people known to the victim, such as a relative or room-mate - grew seven per cent last year, with consumers between the ages of 25 and 34 most likely to be victims of this type of crime.
Commenting on the findings, James Van Dyke, president, Javelin, says: "This great news is a testament to the significant efforts businesses, the financial services industry and government agencies are making to educate consumers, protect data, and prevent and resolve identity fraud. Economic conditions also appear to have contributed to this year-over-year decline, as well as increased security measures and some significant law enforcement successes."