A recent survey of consumer fraud released this week shows that total annual reported fraud was down to $37 billion in 2010 from $56 billion in 2009, but the average out-of-pocket loss soared from $631 from $387, an increase of more than 60 percent.
According to the company behind the survey, the decrease is due in part to banks improving its methods of protecting existing credit card holders, but there is still a problem with criminals cloning identities to take new cards out in other people’s names. This also accounts for the increase in the amount of money lost per victim.
About 3.5 percent of the U.S. population was victimized by identity thieves last year. That’s about 8.1 million people – the number is down 28 percent from 11 million people in 2009.
The survey also points out that Facebook and Twitter users should pay close attention to their credit reports. Consumers who have used social media for at least five years are twice as likely to be hit with identity theft as others.
Those behind the survey suggest that the U.S. economy is tied to the identity fraud rate. A two-year spike in identity fraud ran parallel to the onset of the U.S. recession, increased unemployment and decreased retail sales. Experts say this means that when people can’t get what they want the conventional way, they turn to theft.
Although the survey does indicate that technologies and identity fraud services are working, it doesn’t prove that identity theft is declining overall. The survey was conducted via telephone, and it asked consumers to self-report incidents and costs, a method that is full of holes. Also, bank data indicate fraud is up in many categories. It should be noted also that debit card fraud is up substantially, as is counterfeit fraud, in which thieves use stolen data to create counterfeit credit or debit cards.
The survey also found that identity fraud by a person known to the victim is up 7 percent, and changes of address have become the No. 1 method of account takeover reported by victims.
