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February
23, 2006
Is
Identity Theft Risk Overblown?
It's difficult these days to miss the warnings about identity
theft -- most every newspaper and TV news show has reported
rising numbers of identity theft cases, generally humanizing
the reports with stories of individual identity theft victims
and the trauma the thefts have caused.
But
is the threat of identity theft really growing? What is reality
and what is myth? The 2006 Identity Fraud Survey, released in
late January by the Council of Better Business Bureaus and Javelin
Strategy & Research, has some surprising answers.
According
to the survey of over 5,000 people, the percentage of Americans
who have been identity theft victims in the past year has actually
decreased to 4.0% in 2006 from 4.7% in 2003, or 8.9 million
people in 2006 versus 10.1 million in 2003. And, while the costs
of identity theft have risen slightly, it is rare for a victim
to incur substantial out-of-pocket expenses to resolve the issue
-- $422 on average (out of the $6,383 in actual losses from
the average identity theft).
Three
other interesting and perhaps surprising facts came from the
survey.
First,
identity theft rarely takes place over the Internet. Over 90
percent of identity theft cases originate offline, often through
purses and wallets being lost or stolen. In fact, people who
use the Internet to track accounts were more likely to notice
bank or credit card irregularities and report the theft before
the losses became significant.
Second,
identity theft is perpetrated by someone we know almost as often
as by someone we don't know -- 47% of identity thefts were from
people known to the victim.
Third,
contrary to many reports, it is not the elderly that are usually
victims of identity theft -- in fact, just the opposite. Those
in the 25-34 age group were the most likely to be victimes,
with 5.4% of the group having been victimized. Conversely, only
2.3% of those 65 and over had been victims. Also, the cost in
dollars of identity theft for younger age groups is much higher
than for older groups.
One
thing the numbers definitely do show -- identity theft is a
hassle. In 2003, identity theft victimes spent an average of
33 hours to resolve their case; in 2006, victims spent a full
40 hours dealing with the fallout.
Based
on the survey's findings, it's not so much the bogeyman preying
on Internet victims or the elderly that leads to identity theft.
Rather, it's the person who doesn't keep a close eye on his
or her pocketbook when around strangers -- or friends for that
matter.
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