– released this week by Javelin Strategy & Research – found that the number of identity fraud victims in the United States increased 12 percent to 11.1 million adults in 2009, while the total annual fraud amount increased by 12.5 percent to $54 billion . The report found that protection of data by consumers and businesses and enlisting assistance in resolution are helping consumers and businesses resolve fraud more quickly, and are also reducing or eliminating costs for the consumer. Average fraud resolution time dropped 30 percent to 21 hours, and nearly half of victims now file police reports, resulting in double the reported arrests, triple the prosecutions, and double the percentage of convictions in 2009.
· Fraud is Up, but Consumer Costs and Resolution Hours Drop – The number of identity fraud incidents increased by 12 percent over 2008, reaching the highest level since the survey started in 2003. Javelin believes this may be due to the economic downturn, when historically, higher rates of fraud occur. However, during 2009 there was a drop in fraud costs per victim and a decrease in time to resolution, thanks to increased consumer awareness, assistance provided by financial institutions, consumer support organizations, and law enforcement.
· Increase in New Account Fraud – Identity fraud that resulted from fraudsters opening new accounts with stolen information increased in 2009. The number of fraudulent new credit card accounts increased to 39 percent of all identity fraud victims, up from 33 percent in 2008. New online accounts opened fraudulently more than doubled over the previous year, and the number of new e-mail payment accounts increased 12 percent. This year for the first time, the survey asked about new mobile phone account fraud and 29 percent of victims reported new mobile phone accounts were fraudulently opened.
· Data Breaches Across Various Industries Continue to Compromise Personal Information – Identification most likely to be compromised in a data breach continues to be Full Name (63 percent) and Physical Address (37 percent). With a year-over-year increase of 4 percent, Health Insurance Information is increasingly targeted. The percentage of Social Security numbers compromised decreased to 32 percent from 38 percent in 2008.
· Fraudsters Target Existing Credit Cards – 75 percent of existing card fraud incidents came from credit cards, an increase of 12 percent over 2008. In contrast, existing debit card fraud incidents decreased two percent and represented 33 percent of total existing card fraud in 2009.
· Proactive Consumers are Catching Thieves – Half of all victims filed a police report, resulting in more arrests and convictions. Victims became more vigilant in reporting identity fraud, and reported this resulted in an arrest rate twice last year’s rate, and a prosecution rate that tripled compared to 2008. These findings indicate greater success using information provided by consumers, banks and credit card providers to detect, catch and convict criminals.
· 18 to 24 Year Olds are Slowest to Detect Fraud – Millennials (consumers aged 18 to 24 years old) take nearly twice as many days to detect fraud, compared to other age groups, and thus are fraud victims for longer periods of time. Millennials were found to be the least likely group to monitor accounts regularly and take advantage of monitoring programs offered by financial institutions. However, Millennials were the most likely group to take action such as installing anti-malware software when they discover fraud.
· Small Business Should Exercise Caution – Small business owners suffered identity fraud at one-and-a-half times the rate of other adults. This appears to be due to the fact that small office / home office business owners use personal accounts when making business transactions and make more transactions than typical adults.
· Keep sensitive information from prying eyes. Request electronic statements, use direct deposit, and don’t put checks in an unlocked mailbox. When your Social Security number is requested as an identifier in paper documents, ask if you can provide alternate information. At home or work, secure your personal and financial records in a locked storage device—last year, at least 13% of all identity crimes were committed by someone previously known to the victim. Shred any sensitive paper documents.
· Install anti-virus software on your computer and keep it updated along with your applications and operating system.
· Secure your electronic personal and financial records on your computer behind a password.
· Never respond to requests for personal or account information online (or over the phone). Watch out for convincing imitations of banks, card companies, charities and government agencies in the mail, on the Web, over the phone, or on your mobile device. Use legitimate sources to contact financial institutions, such as an official website or the telephone number listed on statements and the back of bank or credit cards.
· Don’t publish your birth date, mother’s maiden name, pet’s name or other identifying and personal information on social media websites.
· Use unique and hard-to-guess passwords, including for your wireless Internet connection, and don’t access secure Web sites using public Wi-Fi.
· Install security patches and software updates as soon as they are released by verified sources. For phones, turn off Bluetooth and Wi-Fi if they are not being used.
· Monitor current available bank and credit card account balances at least weekly, via online, mobile, ATM, or touch-tone banking. Sign up for alerts to be sent to your mobile phone or e-mail account. Javelin’s study of 5,000 adults finds 43 percent of all reported identity fraud cases are spotted by consumers self-monitoring their accounts and those who use more timely electronic methods to detect fraud experience lower average out-of-pocket costs.
· Monitor your credit reports and non credit account information to spot unauthorized activity. Free credit reports from each of the three major credit bureaus are available each year through annualcreditreport.com or 877-322-8228. Optional fee-based services, such as more extensive monitoring of credit information, personal identity records and Social Security numbers offer timely and thorough protection.
· If you receive a letter notifying you that your private records were involved in a data breach, 1) confirm the letter is legitimate 2) take advantage of any free protection services that are offered and 3) place a fraud alert on your credit report. A fraud alert requires lenders to make sure it is actually you applying for credit. One in four letters are followed by actual fraud, yet many who are alerted fail to take action.
· Work through your bank, credit union or protection services provider to report problems immediately and take advantage of your financial provider’s offers of loss protections (all large financial institutions offer zero-liability for debit and credit cards and many provide the same protection for online banking and bill pay).