Identity fraud occurred every three seconds in the United States and led to $21 billion dollars in losses in 2012 according to Javelin Strategy & Research’s 2013 Identity Fraud Report.
For the second year in a row the incidences of identity fraud in the United States increased affecting 5.26 percent of adults in 2012. Javelin’s 2013 Identity Fraud Report found that data breaches continue to be a very important source for fraudsters committing identity fraud. Nearly one in four U.S. consumers that received a data breach notification letter were victims of identity fraud, which was the highest rate since 2010. Consumers that had their Social Security numbers compromised, however, were five times more likely to be victims of identity fraud than the average consumer.
As consumers’ personally identifiable information (PII) and credentials are compromised in data breaches fraudsters are able to perpetrate more damaging types of fraud attacks. According to Javelin, the increase in identity fraud incidences in 2012 was led by significant jumps in new account fraud and account takeover fraud. Utilizing PII and Social Security numbers fraudsters are able to open new lines of credit, loans or other accounts in a victim’s name. When email addresses, usernames and passwords are compromised fraudsters attempt account takeover at many different web properties as consumers have a tendency to reuse passwords.
Although identity fraud losses in the United States increased to the highest point in three years at more than $21 billion, it’s less than half of the $47 billion in losses that occurred in 2004. Another silver lining is that fraudsters are not able to use stolen identity information for as long as they have in the past. Misuse of compromised consumer identity information lasted an average of 48 days in 2012, a decrease of seven days from 2011 and significantly lower than the average of 95 days in 2011. As both consumers and organizations are getting better at recognizing identity fraud and handling it, such as with putting freezes and fraud alerts on credit profiles, fraudsters have a smaller window for monetizing stolen identity data.
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