FTC Finds Identity Theft Skyrocketing

Share it on Twitter  
Share it on Facebook  
Share it on Google+
Share it on Linked in  
Identity theft has skyrocketed in the past year, affecting nearly 10 million Americans andcosting $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 ofConsumer Protection. ''For several years we have been seeing anecdotal evidence thatidentity theft is a significant problem that is on the rise. Now we know. It is affectingmillions of consumers and costing billions of dollars.''

The FTC report shows that in the past five years, 27.3 million Americans have been victimsof 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 industryanalysts.

Last year, there were 161,819 cases of identity theft reported to the FTC. The federalagency also reported that identity fraud complaints were the most common type of fraudcomplaint reported by American consumers in 2002, accounting for 43 percent of all FTCcomplaints. Nationwide, identity theft reports nearly doubled last year, totaling more than160,00 with losses of more than $343 million.

A year ago, that brought the total number of reported U.S. cases of identity fraud to nearly300,000 since the launch of a database clearinghouse in 2000, according to the TowerGroup, aresearch 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 atWholeSecurity, Inc., an Austin, Texas-based security company. ''Identity theft is one of thequickest, safest ways to do crime today. From a criminal's perspective, it's much easier tosteal someone's identity online than steal someone's wallet or purse, or break into abuilding. 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 banningtogether to fight online identity theft.

The Coalition on Online Identity Theft, which includes Microsoft, eBay and Amazon.com, isgeared to focus on public education; promote preventative technology; document and shareinformation regarding online fraudulent activity, and work with government and lawenforcement to better protect business and consumers.

The coalition formed to fight this problem is initially focused on reaching out to othercompanies and organizations interested in safeguarding the future of e-business, accordingto Harris N. Miller, president of the Information Technology Association of America, thehigh-tech trade group that organized the new coalition. He adds that the group is going totry to coordinate its efforts with the Federal Trade Commission, the Department of Justiceand 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 ZoneLabs, Inc.

Olson of WholeSecurity, which is a founding member of the coalition, says it's important tofocus 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 keylogging 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, lastyear discovered that they were the victims of ID theft by monitoring their accounts. Another26 percent, or 2.5 million people, were alerted to the problem by banks or credit cardcompanies. And 8 percent learned of the problem when they applied for credit and weredenied.

The FTC also notes that 67 percent of victims, or more than 6.5 million people, report thattheir credit card accounts were misused. And 19 percent report that their checking orsavings accounts were misused.

Submit a Comment

Loading Comments...