Javelin Study: A New Identity Fraud Victim Every Two Seconds
A new instance of identity fraud happened every two seconds in the U.S. in 2013, according to a study published Wednesday.
According to the 2014 Identity Fraud Study, an annual report compiled by Javelin Strategy and Research, identity fraud increased by more than 500,000 victims in 2013, the second-highest number since the study began eleven years ago.
While the number of victims is on the increase, the amount of money stolen is down, the study says. The total cost of identity fraud in 2013 was estimated at $18 billion, more than $3 billion less than the year before. The cost figures have dropped radically since 2004, when identity fraud hit an all-time high of $48 billion.
“There were significant strides forward in 2013 in the fight against identity fraud,” says Al Pascual, senior analyst for security, risk, and fraud at Javelin Strategy. “Even though the incidence of fraud increased, the amount stolen significantly decreased.”
Attackers have moved on from simple credit card theft toward opening new accounts in the victim’s name, the study says. Account takeover fraud hit a new record in incidence for the second year in a row and accounted for 28% of all identity fraud.
“Account takeovers for utilities and mobile phone fraud nearly tripled, as fraudsters add new properties to victims’ utility accounts and run up unauthorized charges using ‘premium’ texting services,” the study says. “Consumers that are a victim of account takeover tend to start paying bills online to improve security.”
Additionally, fraudsters increasingly turned to eBay, PayPal, and Amazon with the stolen information, making purchases online at a higher rate than the previous year, Javelin says.
Much of the stolen information appears to emanate from corporate breaches in which customer information is stolen, the study reports. About one in three people who received a data breach notification letter in 2013 became an identity fraud victim, a percentage that has increased over the last two years.
Forty-six percent of consumers with breached debit cards in 2013 became fraud victims in the same year, compared to only 16% of consumers with a Social Security number breached, the study says.
The study recommends that users keep their personal information under wraps, opt for two-factor authentication whenever it is offered, and say no to using Social Security numbers as a method of authentication.
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