According to the US Javelin Strategy & Research study 2009 to 2010 (released 10th February), identity fraud incidents have decreased by 28%. The amount lost to identity fraud has fallen from $56 billion to $37 billion.The study (findings came from a survey of the behaviour and financial habits) was conducted with about 5,000 adults in the US including 470 who were victims of identity fraud.
Approximately 3.5% of the US population (8.1 million), were victims of identity fraud in 2010, down from 11 million people in 2009. 14% of identity fraud was actually committed by someone the victim knew – which shouldn’t come as a surprise. People who know you are more likely to know more about you, where you live, when you were born, where you bank and so on.
What is New Account Fraud? This is when your personal identifying information (i.e.SSN or NIN) and credit history is used to create new financial accounts which are then used to obtain products or services.
Identity fraud is still becoming harder to detect, mainly due to the increase in New Account Fraud which is harder to see than fraud involving stolen credit cards. New account fraud accounts for 46% of the total dollar value of identity fraud according to the study.
The main reason for the delay in identifying this type of fraud is down to this type of fraud taking longer to identify. It would be most useful if the banks provided more understanding of how real-time account alerts work i.e. One Time Passwords (OTP), text alerts etc. Without these controls, fraud is ripe for exploitation and banks and consumers will ultimately bear the costs. For further reading, I suggest you read my feature on: US ID Theft protection services – what you need to know which will show you how to protect your online and offline identity if you live in the US.
Safe surfing folks!