A New Identity Fraud Victim Every Two Seconds in 2013 According to Latest Javelin Strategy & Research Study

The 2014 Identity Fraud Studyreleased this week by Javelin Strategy & Research reports an increase of more than 500,000 fraud victims to 13.1 million people in 2013, the second highest number since the study began. Account takeover fraud hit a new record in incidence for the second year in a row and accounted for 28 percent of all identity fraud.

Additionally, fraudsters increasingly turned to eBay, PayPal and Amazon with the stolen information to make purchases. In 2013, data breaches became more damaging, with one in three people who received a data breach notification letter becoming an identity fraud victim. Encouragingly, the amount criminals stole decreased by $3 billion to $18 billion, reflecting more aggressive actions from financial institutions, identity theft protection providers and consumers.

The study found several significant identity fraud trends:

More victims, less stolen– The number of identity fraud incidents increased by 500,000 consumers over the past year, while the dollar amount stolen decreased to $18 billion, significantly lower than the all-time high of $48 billion in 2004. Those between the ages of 35-44 were at greatest risk. When successful, fraudsters are now more than three times as likely to use the money stolen to buy prepaid or gift cards to make fraudulent purchases. Types of fraud changed – account takeover rose dramatically– Criminals are changing behavior to exploit vulnerabilities. Most tellingly, account takeover hit a new record in incidence for the second year in a row and accounted for 28 percent of identity fraud losses. 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. Consumers that are a victim of account takeover tend to start paying bills online to improve security. Data breaches are the greatest risk factor for identity fraud– In 2013, one in three consumers who received notification of a data breach became a victim of fraud. This is up from one in four in 2012. Forty-six percent of consumers with breached debit cards in 2013 became fraud victims in the same year, compared to only 16 percent of consumers with a Social Security number breached. Identity fraud is more than just credit card fraud– Specifically, non-card fraud saw a rapid rise in 2013. The number of non-card fraud victims nearly tripled and it accounted for $5 billion in fraud. This fraud includes: compromised lines of credit, Internet accounts (e.g., eBay, Amazon) and email payment accounts such as PayPal.

Following are safety tips to protect consumers:

Keep personal data private Opt-in to two-factor authentication wherever it is offered Just say no to SSN authentication Take any data breach notification seriously Don’t wait. Report problems immediately

Go to MoneySmartWeekEp.org For more information.

Content courtesy of Cornerstone Credit Union League.