Thursday, February 11, 2010

ID Theft at All-Time High

The number of identity fraud victims in the U.S. increased 12% to 11.1 million adults in 2009--the highest increase since 2003, according to a new ID theft study. The total annual fraud amount increased by 12.5% to $54 billion.

The high is probably due to the economic downturn, Javelin Strategy and Research said in its study, "The 2010 Identity Fraud Survey Report," which was co-sponsored by Intersections, a CUNA Strategic Service, that specializes in I.D. theft prevention services.

Average fraud resolution time dropped 30% to 21 hours. Nearly half of new victims file police reports, resulting in double the reported arrests, triple the prosecutions and double the percentage of convictions in 2009.

Thirty-nine percent of identity fraud victims reported fraudulent new credit card accounts, up from 33% in 2008. New online accounts opened fraudulently more than doubled over 2008, and the number of new e-mail payment accounts increased 12%.

Financial services companies continue to excel in detecting fraud and alerting their customers. More than one-third of victims first learned about the fraud from their financial institution, the report said.

Other findings:

>  Identification most likely to be compromised in a data breach continues to be full name (63%) and physical address (37%). Compromised health insurance information increased 4% over the last year.

>  About 75% of existing card fraud incidents came from credit cards, an increase of 12% over 2008. Existing debit cards fraud incidents represented 33% of total existing card fraud in 2009 and decreased by 2%.

>  Eighteen to 24-year-olds are the slowest to detect fraud--they take nearly twice as many days to detect it as other age groups. They were found to be less likely to monitor accounts regularly and the least likely group to take advantage of monitoring programs offered by financial institutions. However, they are the most likely group to take action such as switching primary institutions or switching forms of payment if fraud occurs.

> Identity fraud victims in the U.S. grew to 4.8% of  the population, with a projected total of $54 billion in crime.

>  Small business owners suffer fraud at one-and-a-half times the rate of other adults, because small office and home office business owners use personal accounts when making business transactions and make more transactions than typical adults.

"Identity fraud continues on the upswing, and we believe it will continue to rise if consumers fail to take proactive steps to prevent fraudsters from taking advantage of their offline and online transactions and their increasingly exposed personal information on social networks," said Michael Stanfield, Intersections chairman/CEO. "In addition, consumers need to protect themselves and their computers from sophisticated malware, and well-conceived and executed spam and phishing attacks."

Intersections offered several tips to reduce identity fraud, including the use of direct deposit, installing software to protect against viruses and spyware, turning off Bluetooth or Wi-Fi when not in use, monitoring accounts weekly, and acting quickly when fraud is suspected.

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