A report released Wednesday by Javelin Strategy & Research says that in 2012 identity fraud incidents in the United States increased by more than one million victims and fraudsters stole more than $21 billion, the highest amount since 2009.
According to a news release from Javelin Strategy & Research:
The study found 12.6 million victims of identity fraud in the United States in the past year, which equates to 1 victim every 3 seconds.
The report also found that nearly 1 in 4 data breach letter recipients became a victim of identity fraud, with breaches involving Social Security numbers to be the most damaging.
Over the past year, companies are responding more quickly which means a consumer’s information is being misused for fewer days than ever before, and the mean cost per victim has been flattening.
“This past year was one where there were both successes and setbacks for consumers, institutions and fraudsters,” said Jim Van Dyke, CEO of Javelin Strategy & Research. “Consumers and institutions are now starting to act as partners—detecting and stopping fraud faster than ever before. But fraudsters are acting quicker than ever before and victimizing more consumers. Consumers must take data breach notifications more seriously and maintain vigilance to safeguard personal information, especially Social Security numbers.”
The study found several significant identity fraud trends:
Identity fraud incidents and amount stolen increased—The number of identity fraud incidents increased by one million more consumers over the past year, and the dollar amount stolen increased to $21 billion, a three-year high but still significantly lower than the all-time high of $47 billion in 2004. This equates to 1 incident of identity fraud every 3 seconds.
1 in 4 data breach notification recipients became a victim of identity fraud—This year, almost 1 in 4 consumers that received a data breach letter became a victim of identity fraud, which is the highest rate since 2010. This underscores the need for consumers to take all notifications seriously. Not all breaches are created equal. The study found consumers who had their Social Security number compromised in a data breach were 5 times more likely to be a fraud victim than an average consumer.
Fraudsters misuse information fewer days than before—Consumer information was misused for an average of 48 days in 2012, down from 55 days in 2011 and 95 days in 2010. Misuse time was down for all types of fraud including fraud on cards, loans, bank accounts, mobile phone bills and other types of fraud due to consumer and industry action. More than 50 percent of victims were actively detecting fraud using financial alerts, credit monitoring or identity protection services and by monitoring their accounts.
Small retailers are losing out—Fraud victims are more selective where they shop after an incident, and small businesses were the most dramatically impacted. The study found that 15 percent of all fraud victims decided to change behaviors and avoid smaller online merchants. This is a much greater percentage than those that avoid gaming sites or larger retailers.
Read the entire news release from Javelin Strategy & Research HERE.