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According to Javelin’s 2018 Identity Fraud Report, in 2017, there were 16.7 million victims of identity fraud, a record high that followed a previous record the year before. Criminals are engaging in complex identity fraud schemes that are leaving record numbers of victims in their wake. The amount stolen hit $16.8 billion last year as 30 percent of U.S. consumers were notified of a data breach last year, an increase of 12 percent from 2016. For the first time, more Social Security numbers were exposed than credit card numbers.Following the introduction of microchip equipped credit cards in 2015 in the United States, which make the cards difficult to counterfeit, criminals focused on new account fraud. New account fraud occurs when a thief opens a credit card or other financial account using a victim’s name and other stolen personal information. According to the Javelin study, account takeovers tripled in 2017 from 2016, and losses totaled $5.1 billion.
Following the introduction of microchip equipped credit cards in 2015 in the United States, which make the cards difficult to counterfeit, criminals focused on new account fraud. New account fraud occurs when a thief opens a credit card or other financial account using a victim’s name and other stolen personal information.
The Consumer Sentinel Network, maintained by the Federal Trade Commission (FTC), tracks consumer fraud and identity theft complaints that have been filed with federal, state and local law enforcement agencies and private organizations. Of the 3.1 million complaints received in 2016, 1.3 million were fraud-related, costing consumers over $744 million. The median amount consumers paid in these cases was $450. Within the fraud category, debt collection complaints were the most reported and ranked first among all 30 types of complaints identified by the FTC. They accounted for 28 percent of all the complaints reported to the FTC and 66 percent of all fraud complaints. In 2016 thirteen percent of all complaints were related to identity theft. Identity theft complaints were the third most reported to the FTC and had increased by more than 47 percent from 2013 to 2015 but fell about 19 percent from 2015 to 2016.
(1) Percentages are based on the total number of Consumer Sentinel Network complaints by calendar year. These figures exclude "Do Not Call" registry complaints.
Source: Federal Trade Commission, Consumer Sentinel Network.
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(1) Percentages are based on the total number of identity theft complaints in the Federal Trade Commission’s Consumer Sentinel Network (399,225 in 2016). Percentages total to more than 100 because some victims reported experiencing more than one type of identity theft.
(2) Includes fraud involving checking, savings, and other deposit accounts and debit cards and electronic fund transfers.
Source: Federal Trade Commission.
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(1) Population figures are based on the 2016 U.S. Census population estimates.
(2) Ranked by complaints per 100,000 population. The District of Columbia had 198.5 complaints per 100,000 population and 1,352 victims.
Source: Federal Trade Commission, Consumer Sentinel Network.
See also the Identity Theft section of our Web site Click Here
($000)
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(1) Includes stand-alone policies and the identity theft portion of package policies. Does not include premiums from companies that cannot report premiums for identity theft coverage provided as part of package policies.
(2) Direct premiums written in the U.S. and its territories, Canada and other foreign territories.
Source: NAIC data, sourced from S&P Global Market Intelligence, Insurance Information Institute.
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.
Interest in cyber insurance and risk continues to grow as a result of high-profile data breaches and awareness of the almost endless range of exposure businesses face. In 2017, the largest U.S. credit bureau, Equifax, suffered a breach that exposed the personal data of 145 million people, including Social Security numbers. It was among the worst breaches on record because of the amount of sensitive information stolen. A 2016 data leak, called the Panama Papers in the media, exposed millions of documents from the electronic files of Panamanian law firm Mossack Fonseka. In 2015, two health insurers, Anthem and Premera Blue Cross, were breached, exposing the data of 79 million and 11 million customers, respectively. The U.S. government has also been the target of hackers. Recent breaches at the Federal Deposit Insurance Corp. and the Internal Revenue Service follow multiple breaches in May 2015 of the Office of Personnel Management and the Department of the Interior where the records of 22 million current and former U.S. government employees were compromised.
Cyberattacks and breaches have grown in frequency, and losses are on the rise. Breaches again hit a new record in 2017, with 1,579 breaches tracked, up 44.7 percent from 1,091 in 2016, as business and government entities move toward timely reporting, according to the Identity Theft Resource Center (ITRC). The number of records exposed rose to about 179 million, compared with 37 million in 2016. The majority of the data breaches in 2017 affected the business sector, with 870 breaches or 55 percent of the total number of breaches. The business category has suffered the most breaches for the third year in a row. Medical/healthcare organizations were affected by 374 breaches (23.7 percent of total breaches). The banking/credit/financial sector ranked third as it sustained 134 breaches (8.5 percent of all breaches) . These figures do not include the many attacks that go unreported and undetected.
In 2014 McAfee and the Center for Strategic and International Studies (CSIS) estimated annual global losses from cybercrime fall between $375 billion and $575 billion. The costs of cybercrime are growing. An annual study of U.S. companies by the Ponemon Institute cites estimated average costs at $15 million in 2015, up 21 percent from $12.7 million in 2014. These costs ranged among the 58 organizations surveyed from a low of $1.9 million to a high of $65 million each year per company. Cyber insurance evolved as a product in the United States in the mid- to late-1990s as insurers have had to expand coverage for a risk that is rapidly shifting in scope and nature. More than 60 carriers offer stand-alone policies in a market encompassing $2.75 billion in gross written premiums in 2015. By mid-2016 gross premiums written was estimated at $3.25 billion.
(1) As of January 18, 2017.
Source: Identity Theft Resource Center.
(1) Based on complaints submitted to the Internet Crime Complaint Center.
Source: Internet Crime Complaint Center.
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(1) Based on the total number of complaints submitted to the Internet Crime Complaint Center via its website from each state and the District of Columbia where the complainant provided state information.
Source: Internet Crime Complaint Center.
($000)
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(1) Includes stand-alone policies and the cybersecurity portion of package policies. Does not include premiums from companies that cannot report premiums for cybersecurity coverage provided as part of package policies.
(2) Direct premiums written in the U.S. and its territories, Canada and other foreign territories.
Source: NAIC data, sourced from S&P Global Market Intelligence, Insurance Information Institute.