Identity Theft and Cybercrime
THE SCOPE OF IDENTITY THEFT
The 2015 Identity Fraud Study, released by Javelin Strategy & Research, found that $16 billion was stolen from 12.7 million U.S. consumers in 2014, compared with $18 billion and 13.1 million victims a year earlier. There was a new identity fraud victim every two seconds in 2014.
New account fraud also declined in 2014, according to the study. New account fraud occurs when a thief opens a new credit card or other financial account using the victim’s name and Social Security number. The thief runs up debts and leaves the victim responsible for the unpaid bills, and damaging the victims’ credit score. New account victims are three times more likely to take a year or more to discover that their identities were misused compared with other types of fraud, such as thieves taking control of existing non-credit card financial accounts. This allows criminals to use the victim’s identity for a long period, which can result in greater harm to consumers in the form of financial losses and problems with credit history and credit scores.
Of all demographic groups, students indicated the least amount of concern about fraud occurring, with about 65 percent saying they were not very concerned about fraud. Yet, this group is more likely than other demographic groups to perceive significant effects due to the occurrence of fraud (15 percent experiencing moderate or severe impact). Students are also the least likely to detect identity fraud themselves. In fact 22 percent of students who were victims of identity theft were notified of the fraud either by a debt collector or when they were denied credit, three times more frequently than other fraud victims.
IDENTITY THEFT AND FRAUD COMPLAINTS
The Consumer Sentinel database, maintained by the Federal Trade Commission (FTC), contains over 10 million consumer fraud and identity theft complaints that have been filed with federal, state and local law enforcement agencies and private organizations from 2010 to 2014. In 2014 over 2.5 million complaints were filed.
Of the 2.5 million complaints received in 2014, 60 percent were related to fraud, 13 percent were related to identity theft, and 27 percent were for other consumer complaints. The FTC identifies 30 types of complaints. In 2014, for the 15th year in a row, identity theft was the No. 1 type of complaint among the 30 categories, accounting for 332,646 complaints, followed by debt collection, with 280,998 complaints. Internet services, with 46,039 complaints, ranked tenth.
IDENTITY THEFT AND FRAUD COMPLAINTS, 2012-2014 (1)
IDENTITY THEFT BY STATE, 2014
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METHODOLOGY OF IDENTITY THIEVES
The increase in online shopping in recent years has created new avenues for identity thieves. However, a 2013 study by Travelers Insurance of its 2011 identity fraud claims found that burglary and theft of physical objects led to the majority of identity fraud claims. The study identified the following four top causes of identity fraud:
- Stolen wallet or purse (44%)
- Auto burglary (16%)
- Online (15%)
- Home burglary (12%)
As businesses increasingly depend on electronic data and computer networks to conduct their daily operations, growing pools of personal and financial information are being transferred and stored online. This can leave individuals exposed to privacy violations and financial institutions and other businesses exposed to potentially enormous liability, if and when a breach in data security occurs.
In 2000 the Federal Bureau of Investigation, the National White Collar Crime Center and the Bureau of Justice Assistance joined together to create the Internet Crime Complaint Center (IC3) to monitor Internet-related criminal complaints. In 2013 the IC3 received and processed 262,813 complaints, averaging about 22,000 complaints per month. The IC3 reports that 119,457 of these complaints involved a dollar loss, and puts total dollar losses at $782 million. The most common complaints received in 2013 included auto auction fraud involving the sale of automobiles, real estate scams and FBI impersonation email scams.
TOP 10 STATES FOR CYBERCRIME, 2014
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