Rate of Identity Theft

The rate of identity theft has decreased over the past four years; however, over eight million people were still victims of this crime in 2007, due largely to consumers being too casual about the security of their wallet, checkbook and credit cards.

Rachel Kim, Javelin Strategy & Research

Rachel Kim, Analyst at Javelin Strategy & Research, a leading provider of research and analysis on financial services topics, and author of the 2008 Identity Fraud Survey Report reports that 8.1 million Americans were victimized by identity fraud in 2007, a crime amounting to $45 billion in losses. In an interview with LoveToKnow Credit Cards, she answered some of the myths about identity theft and provided practical tips to minimize identity theft.

Identity theft is the unauthorized access of information (such as through a data breach), and may not necessarily translate to fraud. Identity fraud is the actual misuse of information which directly impacts the victim (such as causing a financial loss to the victim.)

The results of our 2008 Identity Fraud Survey Report shows that most information is compromised through lost or stolen wallets or credit cards. Sadly enough, friendly fraud also continues to be a problem, accounting for 17 percent of theft victims. Friendly fraud is caused by the use of our sensitive information (checkbooks, bills, social security information and Personal Identification Numbers [PINS]) by family or friends who have immediate access to our information.

If you are not regularly monitoring your financial accounts or viewing your credit report at least a couple times a year, you may not immediately find out that you've been victimized by identity fraud. Identity thieves might steal information and wait sometime before they inflict any damage. If fraud of a noticeable amount occurs on your account, your financial institution may contact you. If you receive a data breach notification letter, or if you think your information has been compromised, the best step to take is to review your credit information and place a fraud alert or freeze at the three credit bureaus. Fraud alerts notify potential creditors to verify identity before extending any credit in case someone is using your information without your consent. Credit freezes completely stop your credit report from being shared with anyone, and as of November 2007, they are available in all states.

Credit monitoring services are designed to help you keep an eye on your credit activity, and can be effective in that they help you to detect fraud. You do not need to have a credit monitoring service to place a fraud alert or freeze. You can contact the bureaus (all three) to put these in place.

That is a common misconception. The media has sensationalized cyber crime and hacking to the extent that many people have been led to believe that using the Internet makes you more susceptible to identity theft and/or fraud. However, Javelin data shows that only 14 percent of fraud victims who knew how their information was stolen had it accessed via Internet-based sources (phishing, malware, etc.). Year over year, we see the greatest source of compromise occurring through traditional methods, such as a lost/stolen wallet, checkbook or credit card. In fact, monitoring accounts online through Internet banking provides a strong security advantage since it can actually help detect potential fraud much faster than waiting for and reviewing paper statements.

1. Monitor your accounts online often at bank and credit card websites.
2. Review your credit bureau information at least annually.
3. Never provide sensitive financial information over the phone, including Social Security numbers, PINs or account numbers, unless you placed the call directly to a verified and trusted location.
4. Install and regularly update firewall, browser, anti-spyware and anti-virus security software on your personal computer, and keep operating systems updated.
5. Reduce unnecessary access to your personal information. Don’t carry Social Security cards or unused credit cards or checks, and don’t leave sensitive documents out in the open.

1. Contact your bank, credit card issuer or merchant immediately and close compromised accounts without delay to minimize losses if:

• Your checkbook, wallet, or credit and debit cards are lost or stolen
• You fail to receive statements, invoices or new and renewed credit or debit cards.

1. If your information has been compromised, through a data breach or otherwise, consider placing a fraud alert on your credit report or a credit freeze.
2. Contact the Federal Trade Commission (FTC) to report the situation, online or by phone at (877) 438-4338.

The rate of identity theft is starting to decline as more and more consumers increase their knowledge of identity theft and take actions to minimize the risk of the theft of their identity. LoveToKnow Credit Cards has gathered information on several aspects of identity theft. If you have questions that are not answered in any of the articles, just add your question in the comments box at the bottom of any article. Our experts will respond quickly to answer your specific question.

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