Is Identity Theft Still An Issue?
It hasn't been the front page story that it once was. What used to dominate the news, as billions of dollars were stolen, no longer make headlines. Even the commercials of the companies offering to protect you from financial disaster are not much more than a memory (remember the commercials where the company owner put his Social Security number on the side of truck?). TUTORIAL: Investing 101
Does that mean that there's victory to be claimed against identity theft? Have we won this war? Is identity theft the crime of years ago, or is it still a formidable opponent that runs rampant?
Consumer Sentinel Network
You may have never heard of the Consumer Sentinel Network, but you may be part of the database. In 1997, the Federal Trade Commission created this database to collect fraud and identity theft complaints, reported by consumers. Through the end of 2010, the database had collected 6.1 million complaints with 1.3 million of those filed in 2010. Of the 6.1 million complaints, the most common reports were those of identity theft. Of the complaints, 19% were identity theft related, with the second most common being debt collection complaints, with only 11% of the complaint volume. (For related reading, see What You Need To Know About Insurance Fraud.)
Up and Down?
A report released in early 2011, by Javelin Strategy & Research, showed that the incidence of identity theft dropped sharply, but the out of pocket costs nearly doubled. According to the research, 8.1 million adults were victims of identity fraud, down 28% or 3 million people, from 2009.
But, the out of pocket expenses to consumers rose 63% from $387 in 2009 to $631 in 2010. The reason for this seemingly conflicting data, comes from a shift in victims. In the past, perpetrators targeted existing credit card accounts, and, in smaller scale, bank accounts. Because of the massive education campaign, taken by the Federal Government and consumer rights organizations, consumers now watch their credit reports more closely, making identity theft that appears on these reports more difficult.
Already established accounts are not as closely monitored, according to the report. Debit card fraud doesn't always come with the same protections as credit cards. This is largely the reason that the out of pocket expense to consumers has risen sharply.
Reuters reported that a 2011 report, that analyzed credit applications, found that 2 to 3 million elderly Americans had their identity stolen by younger family members between 2006 and 2010. This was sharply higher than other data suggested. Friendly fraud isn't easily caught, because activity by family members doesn't stand out as questionable.
The Bottom Line
The amount of fraud may be down, but the damage done by those perpetrating the crimes are even more devastating. Experts still advise to use common sense to avoid fraud. Order free copies of your credit report, and go over each entry carefully. Save receipts and match them to your monthly credit card statements, and keep accurate bank records in one of the many financial software programs that allow you to match your records with your bank statement. Like any transaction, use your intuition. If something doesn't seem right, it probably isn't. (For related reading, see Detecting Financial Statement Fraud.)