Facts + Statistics: Identity theft and cybercrime

The scope of identity theft

Identity theft continues to pose challenges for consumers as criminals develop new mechanisms to commit fraud. According to the 2019 Identity Fraud Study from Javelin Strategy & Research, the number of consumers who were victims of identity fraud fell to 14.4 million in 2018, down from a record high of 16.7 million in 2017. However, identity fraud victims in 2018 bore a heavier financial burden: 3.3 million people were responsible for some of the liability of the fraud committed against them, nearly three times as many as in 2016. Moreover, these victims’ out-of-pocket fraud costs more than doubled from 2016 to 2018 to $1.7 billion. New account fraud losses also rose slightly, with criminals beginning to focus their attention on different financial accounts, such as loyalty and rewards programs and retirement accounts. Additionally, criminals are becoming adept at foiling authentication processes, particularly mobile phone account takeovers. These takeovers nearly doubled to 680,000 victims in 2018, compared with 380,000 in 2017. The study does note that the shift to embedded chip cards is helping to contain existing card fraud, which showed the steepest decline of any fraud type in 2018, with losses at $14.7 billion in 2018, down from $16.8 billion in 2017.

Identity theft and fraud complaints

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 million identity theft and fraud reports received in 2018, 1.4 million were fraud-related, and 25 percent of those cases reported money was lost. In 2018, consumers reported losing about $1.48 billion related to fraud complaints, an increase of $406 million from 2017. The median amount consumers paid in these cases was $375. Within the fraud category, imposter scams were the most reported and ranked first among the top 10 fraud categories identified by the FTC. They accounted for $488 million in losses. In 2018, 15 percent of all complaints were related to identity theft. Identity theft complaints were the third most reported to the FTC. Identity theft claims fell from 2015 to 2018 by 9.3 percent, but began to increase again in 2018 and were up 19.8 percent from 2017 to 2018.

Identity Theft And Fraud Reports, 2015-2018 (1)

 

id_theft_and_fraud_complaints_2015-2018.gif

(1) Percentages are based on the total number of Consumer Sentinel Network reports by calendar year. These figures exclude "Do Not Call" registry complaints.

Source: Federal Trade Commission, Consumer Sentinel Network.

View Archived Graphs

See also the Identity Theft section of our Web site Click Here

Cybercrime

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 data security breach occurs.

Interest in cyber insurance and cyberrisk continues to grow as a result of high-profile data breaches and awareness of the almost endless range of exposures businesses face. In 2018, 500 million records were exposed in November from Marriott International; 340 million records were exposed in June from Exactis, a marketing firm; 150 million were exposed at Under Armour; 92 million at MyHeritage, a genealogy firm; and 87 million records at Facebook. 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.

In 2018, the number of breaches reported fell from 2017, but the amount of records containing personally identifiable information soared. Breaches had reached a new record in 2017, with 1,632 breaches tracked, according to the Identity Theft Resource Center (IRTC), and the number of records exposed in 2017 rose to about 198 million. In 2018, the number of breaches fell 23 percent from 2017 to 1,244 breaches, but the number of records exposed that contained sensitive information more than doubled to 447 million, a 126 percent increase. Because only half the total number of breaches reported by the IRTC included the number of records exposed, the actual total number of exposed records likely exceeds the reported number substantially. The business sector suffered the most breaches by industry in 2018, with 571 breaches or 46 percent of the total number of breaches. Medical/healthcare organizations were affected by 363 breaches or 29 percent of total breaches. The banking/credit/financial sector ranked third as it suffered 135 breaches (11 percent of all breaches). These figures do not include the many attacks that go unreported and 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. The average cost of data breach globally was $13.0 million in 2018, up 12 percent from $11.7 million in 2017, according to a 2019 study from the Ponemon Institute and Accenture. Researchers polled 355 organizations located in 11 countries to determine what costs they faced after a cyberattack, such as the costs to detect, recover, investigate and manage the incident response. They also included the cost of activities that occur after the fact and efforts to reduce business interruption and loss of customers. In the United States, the average annual cost of cybercrime rose 29 percent in 2018, to $27.4 million, compared with $21.2 million in 2017. Globally, the banking industry had the highest average annual cost in 2018—$18.4  million—up from $16.7 million in 2017, followed by utilities and software companies. By type of attack, malware incidents had the highest cost, at $2.6 million followed closely by web-based attacks at $2.3 million.

In 2018, the ITRC reported that hacking was the most used method of breaching data, with 482 data breaches resulting in almost 17 million records exposed. Unauthorized access ranked second with 377 data breaches affecting the highest number of records exposed by data breach type—404 million. Accidental exposure had the third highest number of breaches, 114, with 22 million records exposed.

In 2019 through October 10 the ITRC tracked 1,152 breaches that exposed about 160 million records. The total includes the Capital One breach of July 29, 2019 that exposed 100 million records. The banking, credit and financial category was the most affected sector by number of records exposed, with 100.4 million records, or 62 percent of all records exposed so far in 2019. This sector had 71 breaches, or 6.2 percent of all breaches detected. The medical and healthcare sector had about 38 million records exposed to date, or 23 percent of all records exposed in 404 breaches that accounted for 35 percent of all breaches.

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. In 2018, 545 insurers reported writing cyber insurance, up from 505 in 2017, according to NAIC data sourced from S&P Global Market Intelligence.  Direct premiums written totaled $2.0 billion in 2018, at companies that can report premiums for stand-alone and coverage provided as part of a package policies, up from $1.86 billion in 2017.

According to the Insurance Information Institute (I.I.I.) and J.D. Power 2019 Small Business Cyber Insurance and Security Spotlight Survey^SM, 12 percent of businesses surveyed suffered one or more cyber incidents in the prior year, up from 10 percent in 2018. Nearly 71 percent said they are “very concerned” about cyber incidents, up from 58 percent in 2018, and 75 percent said they believe the risk of being victimized by a cyberattack is growing at an alarming rate–up from 70 percent in 2018. Among the 44 percent of respondents who said they do not currently have cyber insurance and the 21 percent who said they do not know whether they do, 64 percent said they do not plan to purchase a cyber insurance policy in the next 12 months. While this is down from 70 percent in 2018 and given small companies’ growing awareness and concerns about cyberrisk, insurers and agents and brokers might be able to increase their overall support of this market by addressing the issues of affordability and coverage limitations that seem to be an obstacle to purchasing.

Number Of Data Breaches And Records Exposed, 2009-2018 (1)

 

num_of_data_breaches_and_rec_exp_09-18.gif

(1) As of January 7, 2019.

Source: Identity Theft Resource Center, 2018 End of Year Data Breach Report.

View Archived Graphs

The Internet Crime Complaint Center (IC3), a joint project of the Federal Bureau of Investigation, the National White Collar Crime Center and the Bureau of Justice Assistance monitors Internet-related criminal complaints. In 2018 the IC3 received and processed 351,937 complaints, a 17 percent increase from 2017. Losses soared to $2.7 billion in 2018, almost double losses reported in 2017 that totaled $1.4 billion. In terms of dollar losses, business email compromise and email account compromise complaints were the most reported scams, with about $1.3 billion in losses, close to half of all losses. This type of scam targets both businesses and individuals who perform wire transfers. Criminals hack email accounts and attempt unauthorized fund transfers. About 20,000 people were victims of email account scams. Personal data breaches resulted in $149 million in losses and identity theft caused $100 million in losses. About 51,000 people were victims of personal data breaches and 16,000 were victims of identity theft scams.

Almost one out of four victims (24.1 percent) was over the age of 60. Close to half of all victims were under the age of 50, and they accounted for 57 percent of all losses in 2018.

Cybercrime Complaints, 2014-2018 (1)

 

cyb_crime_comp_14-18.gif

(1) Based on complaints submitted to the Internet Crime Complaint Center.

Source: Internet Crime Complaint Center.

View Archived Graphs

Additional resources

Federal Trade Commission

Internet Crime Complaint Center