Trends in Identity Theft

More than 8.1 million adults in U.S. fell victim to the ID theft for the year 2010. Though the number of identity theft instances decreased, the amount lost by the victims rose significantly, as per the 2011 Identity Fraud Theft Report from Javelin Strategy & Research.

New types of consumer frauds have evolved into the market incurring more losses to the victims. The average amount lost due by consumers due to id theft in 2010 was $631 per incident. This also includes the amount payed by victim towards payoff of any fraudulent debt as well as fees to resolve the fraudulent claims.

Opening an account without the victim’s knowledge was seen to be the most damaging form of id fraud which caused $17 billion losses to victims in 2010 itself. This fraud, called as new account fraud, is not only harder to detect but also severely impacting to the victims.

Account takeover was another common form of the id fraud. Changing the physical address of the victim’s pre-existing account, without his knowledge, was the most popular tactic comprising of 44% of the total account takeover incidents in 2010. Registering an account with the victim’s name was another popular tactic.

In 2010, 14% of the id thefts were committed by the people who were well-known to the victims. This form of fraud is called Friendly fraud, where the fraudsters will be either friend, relative, neighbor or roommate of the victim. Consumers between 25-34 age were the most likely to fell victim for friendly fraud. The most common form of fraud committed by the friendly fraudsters was new account fraud. In 2010, around 30% of the new account fraud was perpetrated by someone well know to the victim. Theft of Social Security Number was also most prevalent in friendly fraudsters.

The above trends for Id fraud suggests the importance of safeguards on not only private information like bank account number and passwords, but also personal information like SSNs.