Thursday, September 13, 2018

What's the Cost of Identity Theft?

Identity thieves stole almost $17 billion in 2017. Although this figure is an unfathomable amount for most of us, it is merely the amount of actual money stolen and doesn’t take into consideration things like “time spent resolving identity theft issues and the emotional and psychological stresses caused by identity theft.”

“Since 2003, the Identity Theft Resource Center (ITRC) has been surveying victims of identity theft to understand things like how long it takes them to find out they're a victim, what they experience, how long it takes them to fix the issues caused by identity theft and how much money it costs them to recover.

“While a majority of people find out in within three months, 16% of people didn't find out for three years.” Unless credit scores are monitored regularly, victims don’t usually find out until they have been turned down for a credit card or a loan.

“The 2018 Identity Fraud Study released in February, 2018 by Javelin Strategy & Research, revealed that the number of identity fraud victims increased by eight percent (rising to 16.7 million U.S. consumers) in the last year, a record high since Javelin Strategy & Research began tracking identity fraud in 2003.

The study found that despite industry efforts to prevent identity fraud, fraudsters successfully adapted to net 1.3 million more victims in 2017, with the amount stolen rising to $16.8 billion.

With the adoption of embedded chip cards and terminals, the types of identity fraud continued to shift online and away from physical stores. The complexity of fraud is also on the rise as criminals are opening more new accounts as a means of compromising accounts consumers already have.

The 2018 Identity Fraud Study found four significant trends:

Record high incidence of identity fraud – In 2017, 6.64 percent of consumers became victims of identity fraud, an increase of almost one million victims from the previous year. This increase was driven by growth in both existing non-card fraud and account takeover (ATO).

Account takeover grew significantly – Account takeover tripled over the past year, reaching a four-year high. Total ATO losses reached $5.1 billion, a 120 percent increase from 2016. Account takeover continues to be one of the most challenging fraud types for consumers with victims paying an average of $290 in out-of-pocket costs and spending 16 hours on average to resolve. This translates to more than 62.2 million hours of time consumers lost in 2017. That is enough time for more than three million people to binge watch the first and second season of Stranger Things.

Online shopping presents the greatest fraud opportunity – EMV is driving more fraudsters to seek online channels for fraud. Card Not Present Fraud is now 81 percent more likely than point of sale fraud, the greatest gap Javelin has observed.

Fraudsters are getting more sophisticated
– Fraudsters are getting more sophisticated in their attacks, and using more complex and difficult to detect monetization schemes. One and a half million victims of existing account fraud had an intermediary account opened in their name first. This is 200 percent greater than the previous high.

Take every precaution possible to protect yourself from identity theft. Some specific ways are to:

  • Monitor your credit report monthly, if possible.
  • Never divulge too much personal information to those who you don’t trust, such as on social media.
  • Shred junk mail, medical records or any other documents with sensitive information on them. A little extra time and precaution can save you major amounts of time, money and frustration in the long run.
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1 comment:

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