FTC Finds Identity Theft Skyrocketing
Identity theft has skyrocketed in the past year, affecting nearly 10 million Americans and costing $48 billion in damages, according to a new report from the Federal Trade Commission.
''These numbers are the real thing,'' says Howard Beales, director of the FTC's Bureau of Consumer Protection. ''For several years we have been seeing anecdotal evidence that identity theft is a significant problem that is on the rise. Now we know. It is affecting millions of consumers and costing billions of dollars.''
The FTC report shows that in the past five years, 27.3 million Americans have been victims of identity theft. That number includes 9.9 million people in the last year alone.
The numbers, compared to the ones reported last year, are staggering, according to industry analysts.
A year ago, that brought the total number of reported U.S. cases of identity fraud to nearly 300,000 since the launch of a database clearinghouse in 2000, according to the TowerGroup, a research firm focused on the global financial industry.
Today, those numbers have multiplied in the past 12 months alone.
''I wasn't surprised at the increase,'' says Scott Olson, a senior vice president at WholeSecurity, Inc., an Austin, Texas-based security company. ''Identity theft is one of the quickest, safest ways to do crime today. From a criminal's perspective, it's much easier to steal someone's identity online than steal someone's wallet or purse, or break into a building. There's less risk and with a much greater chance for gain.''
The FTC report comes out on the heels of news that a group of industry players is banning together to fight online identity theft.
The Coalition on Online Identity Theft, which includes Microsoft, eBay and Amazon.com, is geared to focus on public education; promote preventative technology; document and share information regarding online fraudulent activity, and work with government and law enforcement to better protect business and consumers.
The coalition formed to fight this problem is initially focused on reaching out to other companies and organizations interested in safeguarding the future of e-business, according to Harris N. Miller, president of the Information Technology Association of America, the high-tech trade group that organized the new coalition. He adds that the group is going to try to coordinate its efforts with the Federal Trade Commission, the Department of Justice and other federal, state and local law enforcement agencies.
Founding members of the coalition include: Amazon.com, the Business Software Alliance, Cyveillance, Inc., eBay, the Information Technology Association of America, McAfee Security, Microsoft, RSA Security Inc., TechNet, Verisign, Visa U.S.A., WholeSecurity, Inc., and Zone Labs, Inc.
Olson of WholeSecurity, which is a founding member of the coalition, says it's important to focus on the technological angle of the problem right out of the starting gate.
''There's a lack of a technological solution to spoofed Web sites and faked email,'' explains Olson. ''We need to be able to better detect eaves-dropping software and key logging software on a computer. We need the technology to prevent these threats.''
The FTC reports that 5 million people, or 52 percent of all identity theft victims, last year discovered that they were the victims of ID theft by monitoring their accounts. Another 26 percent, or 2.5 million people, were alerted to the problem by banks or credit card companies. And 8 percent learned of the problem when they applied for credit and were denied.
The FTC also notes that 67 percent of victims, or more than 6.5 million people, report that their credit card accounts were misused. And 19 percent report that their checking or savings accounts were misused.
July 23, 2003
A steady rise in online identity theft should be signaling IT managers to shore up customer information before they face any further deterioration in consumer confidence.