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 BY STATE, 2014
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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 2014 the IC3 received and processed 269,422 complaints, averaging about 22,500 complaints per month. The IC3 reports that 123,684 of these complaints involved a dollar loss and puts total dollar losses at over $800 million. The most common complaints received in 2014 involved auto and real estate fraud and government impersonation email scams.
Interest in cyber insurance and risk has grown in 2014 and 2015 as a result of high-profile data breaches, including a massive data breach at health insurer Anthem that exposed data on 78.8 million customers and employees, and another at Premera Blue Cross that compromised the records of 11 million customers. The U.S. government was targeted by hackers in two separate attacks in May 2015 that compromised personnel records on as many as 14 million current and former civilian government employees. A state-sponsored attack against Sony Pictures Entertainment, allegedly by North Korea, made headlines in late 2014.
Cyberattacks and breaches have grown in frequency, and loss costs are on the rise. In 2014 the number of U.S. data breaches hit a record 783, with 85.6 million records exposed. The majority of the 783 data breaches in 2014 affected medical/healthcare organizations (42.5 percent of total breaches) and business (33.3 percent), according to the Identity Theft Resource Center. In the first half of 2015 some 400 data breach events were publicly disclosed, with 117.6 million records exposed. These figures do not include the many attacks that go unreported. In addition, many attacks go undetected. Despite conflicting analyses, the costs associated with these losses are increasing. McAfee and the Center for Strategic and International Studies (CSIS) estimated the likely annual cost to the global economy from cybercrime is $445 billion a year, with a range of between $375 billion and $575 billion.
TOP 10 STATES FOR CYBERCRIME, 2014
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