Establishing Digital Trust: Don't Sacrifice Security for Convenience
In a year that exposed the largest U.S. identity theft case, with more than 30,000 victims and an excess of $2.7 million in losses, it is evident that the problem is wide-reaching, persistent, and growing. Aberdeen predicts that identity theft cases will multiply in 2003, with total economic losses to consumers, business, merchants, credit issuers, and the financial industry totaling $24 billion.
Electronic payment solution provider, Star Systems, found that 5.5 percent of the respondents in a November 2002 survey of 2,000 U.S. adults had been victims of identity theft, and 19 percent personally knew someone whose identity was stolen.
Of the victims identified in the survey, 29 percent reported having credit cards in their name issued to another person; 23 percent had bank accounts in their name opened by another person; and 21 percent had loans in their name by another person.When asked if they knew how their personal information was appropriated, 35 percent simply did not know. The Internet may be a likely scapegoat but Star found that 16 percent attributed the identity theft to a lost or stolen wallet. When Pew Internet & American Life Project released an August 2000 study, a small portion (8 percent) of the 19 percent of Internet users that had been victims of credit card fraud or identity theft attributed it to an online source, while 80 percent indicated that the theft occurred offline.
The FTC found that most victims of identity theft were in the 30-39 year old age range, with New York City having the highest number of identity theft victims, followed by Chicago, Los Angeles, Houston, Miami, and San Francisco.
Data from the FTC indicates that victims' information is most often misused in frauds related to credit cards (42 percent), phone or utilities (20 percent), and banks (13 percent), as well as employment, loans, government benefits, and other criminal acts.
State and federal laws have been enacted to help protect Americans from the fallout of identity theft but the FTC urges consumers to guard information carefully, and to investigate any suspicious charges, withdrawals, or bills. Definite acts of identity theft should be reported to major credit bureaus, local police, creditors, and financial institutions.