Identity Fraud Incidents are Down While Consumer Costs are up According to Javelin Strategy and Research’s 2011 Identity Fraud Survey Report
CHANTILLY, Va., Feb. 8, 2011 /PRNewswire/ — The newly released Javelin Strategy & Research 2011 Identity Fraud Survey Report reveals that the number of identity fraud incidents decreased in the United States by 28 percent – three million fewer victims than last year – and the total overall fraud amount decreased from $56 billion to $37 billion in 2010. However, mean consumer out-of-pocket costs due to identity fraud increased 63 percent from $387 per incident in 2009 to $631 per incident in 2010. This increase is attributed to a spike in new account fraud and “friendly fraud,” which are generally harder to detect.
Intersections Inc. (Nasdaq: INTX) a leading provider of consumer and corporate identity theft prevention services, is a co-sponsor of Javelin’s Identity Fraud Survey Report for the third year in a row. “We are thrilled to see a decline in the number of identity fraud incidents and overall fraud costs across the country, which can be attributed in part to the hard work of businesses, the financial services industry, government agencies and to the increased vigilance of consumers,” said Michael Stanfield, Chairman and CEO of Intersections Inc. “However, despite this downward trend, new account fraud that results in higher out-of-pocket costs is becoming more prevalent, and consumers need to be more proactive in protecting their electronic transmissions and exposures of personal and financial information to prevent such fraud. The reduction in credit card usage and issuance during the financial crisis has resulted in a reduction in credit card related fraud. But consumers should expect to see an increase in card usage as the economy recovers, and will need to vigilantly guard themselves against increased card fraud.”
The survey, now in its eighth consecutive year, is the nation’s longest-running study of identity fraud, with approximately 38,000 U.S. respondents over the past eight years. It is built on FTC methodology and evolves each year to address new and emerging threats and technologies.
“We are excited to have Intersections support this important study for the third year in a row,” said James Van Dyke, president and founder of Javelin Strategy & Research. “Intersections is not only a leading provider of identity risk management services but they are also a leading educator in the field of consumer identity theft protection and prevention. We look forward to working with them for many years to come.”
“The findings of the Javelin report reinforce what we’ve been telling consumers for more than a decade – be vigilant with whom you are sharing your personal information and where you are sharing it. We want consumers to better educate themselves about the risks and threats associated with their actions and those of fraudsters so they can successfully avoid falling into an identity fraudster’s trap,” said Stanfield.
Intersections’ Insights & Recommendations
The findings in this year’s study indicate that fraudsters are taking advantage of loopholes and blind spots like non-credit fraud, which is rarely reported to credit bureaus and can offer them greater success in compromising personal and financial information as a result.
As fraudsters and cybercriminals continue to get smarter, consumers need to be more vigilant. Consumers can help protect their own identities by investing in automated, early fraud warning systems like those offered by Intersections that will help minimize the impacts of identity fraud. A comprehensive package of prevention, detection and recovery services is essential to help address some of the vulnerabilities of consumers outlined in the key findings of the survey:
- New Account Fraud Tops All Others: New account fraud, accounts that have been opened without the victim’s knowledge, is harder to detect and the most likely to severely impact victims. New account fraud was responsible for the greatest fraud amount in 2010 ($17 billion). Identity detection and web monitoring services, like those offered by Intersections, can track for unauthorized usage of consumer’s personal information like new car loans and home applications. It can detect when a user’s Social Security, credit card, and bank account numbers are found in unsecure locations.
- Physical Address Change is #1 Means of Account Takeover: The survey found changing physical addresses was the most common method of account takeover in 2010. Services that monitor the user’s address will alert them to any changes, enabling them to take immediate action if necessary.
- Most Victims Discovered They Had Been Victimized through Bank & Credit Card Company Notifications: Consumers can monitor new account openings through monitoring services, and should also sign up for notifications from their banks. Again, Intersections emphasizes an early fraud detection system to help minimize the impacts of personal and financial losses.
- Mean Resolution Time is Increasing: The time consumers spent resolving an identity fraud incident significantly increased in 2011. Prevention is key to minimizing the costs associated with identity fraud. Vigilant consumers can decrease this time by taking stock of their personal and financial profiles, and monitoring that information before fraudsters wreak havoc on them.
Early Warning Fraud System
Keeping personal information personal is critical. An early warning fraud system is particularly important to help keep that personal information safe. Unsafe social networking practices make it easy for fraudsters to build a full identity on their victims. This along with phishing emails, unverified banking, shopping, and transactional sites, and unsecured wireless sites, are playgrounds for fraudsters. Updated security software including anti-virus, anti-spyware and firewall software is an essential baseline to identity protection. Services like ID VaultÃ‚®, Mobile LockboxÃ‚® and PrivacyProtectÃ‚®, which are included in the Identity GuardÃ‚® TotalProtection(SM) package, keep users’ passwords, mobile devices, and online connections safe from keystroke logging, phishing and pharming.
Intersections Inc. (Nasdaq: INTX) is a leading provider of consumer and corporate identity risk management services. Eight million consumers are actively protected by Intersections’ consumer and breach remediation services offered through North America’s leading financial institutions, directly to consumers under its award-winning Identity GuardÃ‚® brand (www.identityguard.com), and through its exclusive partnership with ITAC, the Identity Theft Assistance Center. Since its inception in 1996, Intersections has protected more than 30 million consumers.
Javelin is the leading independent provider of quantitative and qualitative research focused exclusively on financial services topics. Based on the most rigorous statistical methodologies, Javelin conducts in-depth primary research studies to pinpoint dynamic risks and opportunities. Javelin helps its clients achieve their initiatives through three service offerings, including syndicated research subscriptions, custom research projects and strategic consulting. Javelin’s client list includes some of the largest banks, credit unions, card issuers, and technology enterprises in the financial services industry.
SOURCE Intersections Inc.