Survey Shows ID Theft Down 28 Percent In 2010
Javelin Strategy & Research released a report of their annual survey of consumer fraud on Tuesday which showed total reported fraud was down to $37 billion in 2010 from $56 billion in 2009. The average out-of-pocket loss soared however to $631 from $387 — an increase of more than 60 percent, Reuters reports.
The number of identity theft victims fell by more than 25 percent in the US last year, the largest annual drop on record, but individual victims lost more money on average than ever before. 8.1 million people — 3.5 percent of the US population — were victims of identity theft last year. That was down 28 percent from 11 million people in 2009. The number of victims was the lowest since 2007, before the financial crisis hit.
The founder of Javelin Strategy & Research, James Van Dyke, says banks have improved protecting existing credit card holders but a large problem still exists with criminals cloning identities to take new cards out in other victims names. “The rise in the amount the average victim lost can be attributed to the cloning of credit cards in other people’s names and rising debit card fraud, which usually take longer to detect and lead to higher losses,” Van Dyke tells Reuters.
Javelin has been running the survey for eight years and Van Dyke said the company has confirmed its reported conclusions of a correlation between identity theft and the state of the economy, especially the retail sector.
“As retail sales go up, the identity fraud rate sinks. When retail sales decrease, the identity fraud rate rises,” Van Dyke tells Reuters. “This finding may be due to many factors, such as higher levels of investment in security in better economic times and/or greater allowance of questionable transactions in times of economic need.”
Van Dyke conclude that fraud, while down overall, “friendly fraud” — when the victim is known to the criminal — was up 7 percent last year, with those aged 25 to 34 most likely to be victims.
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