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.

Published 02/23/06 (Modified 05/07/12)