Consumer Costs Fell Sharply by 31 Percent; Women 26 Percent More Likely To Suffer Fraud than Men
The 2009 Identity Fraud Survey Report released by Javelin Strategy & Research confirms that the number of identity fraud victims has increased 22 percent to 9.9 million adults in the United States, while the total annual fraud amount only increased slightly by seven percent to $48 billion over the past year. The report found detection and resolution efforts are working well – consumers and businesses are detecting and resolving fraud more quickly. As a result the mean consumer costs of identity fraud plummeted by 31 percent to $496 per incident in 2008. The study also found that women were 26 percent more likely to be victims of identity fraud than men this past year.
Now in its fifth consecutive year, the comprehensive survey is independently produced by Javelin Strategy & Research. It is the nation’s longest-running study of identity fraud, with 24,000 U.S. respondents over the past five years. Identity fraud is defined as the unauthorized use of another person’s personal information to achieve illicit financial gain. In October 2008, nearly 4,800 telephone interviews with U.S. consumers identified important findings about the impact of fraud while at the same time uncovering both areas of progress and concern for Americans.
Overall Identity Fraud Incidents Increased; Cost to Consumers is Down:
Approximately 1.8 million more adults fell victim to identity fraud in 2008, compared to 2007. This is the first year-over-year increase since Javelin began collecting data in 2004, when 4.25 percent of the overall adult population in the United States was victimized. The greatest increase occurred in fraud on existing card accounts, rather than the crimes which have a more severe impact such as opening new accounts.
Despite the increase in fraud incidents, the total annual fraud amount rose just seven percent to $48 billion, up from $45 billion in the previous report and 20 percent lower than it was in 2004. These figures represent the total amount that criminals were able to obtain illegally. The average fraud amount decreased (by 12 percent) to $4,849.
This decrease is likely attributable to greater consumer awareness of the risks - increased availability of security, controls and consumer education campaigns by banks, card associations and other organizations; and greater access to more sophisticated prevention and detection resources from privacy and security companies. As businesses and consumers continue to work closely together and with consumers more frequently updating anti-spyware and anti-virus software and protecting sensitive data by safely adopting online financial services, such as online banking and bill paying, Javelin Strategy & Research expects the fraud-reduction-per-incident trend to continue downward.
Gender Disparity in Identity Fraud:
This year’s Identity Fraud Report found that women were 26 percent more likely to be victims of identity fraud than men. Many factors lead to this disparity. Fraud attacks involving women occur more often via in-person channels, such as stores and restaurants, where there is less consumer control. There is a greater percentage of women making in-person purchases and women were almost three times more likely than men to report their information stolen during an in-person purchase. Additionally, recent merchant data breaches impacted women more than men (12 percent vs. 10 percent).
The study also found disparity in how fraudsters use information obtained from women. Fraud affecting women took significantly longer to begin after the initial compromise of the data: 14 percent of female victims did not experience fraud until more than one year after their data was compromised. For men, this figure was only two percent.
Men are more likely to use tools that help detect fraud more quickly, such as email or mobile alerts. Currently, it takes women on average almost twice as long to catch fraud as men. That gap could narrow if everyone takes advantage of the fraud detection tools available to them.
About Javelin Strategy & Research:
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.
MyBackgroundCheck.com – a member of The Pre-employ.com Family of Companies – was one of the first consumer requested background check services for individuals and is now a nationwide leader of the growing trend in personal information control. For more information, please visit www.MyBackgroundCheck.com, email info@mybackgroundcheck.com, or call 1-800-503-2364.
Related Blog: Why Women Suffer More Identity Theft and Fraud than Men