[February 02, 2016] |
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13.1 Million Identity Fraud Victims but Less Stolen in 2015, According to Javelin
The 2016
Identity Fraud Study released today by Javelin Strategy & Research (@JavelinStrategy),
revealed that the number of identity fraud victims increased by three
percent (13.1 million consumers) in the U.S. last year, but that the
amount stolen decreased by six percent to $15 billion. The study found
that the rise of EMV has already had a significant impact on fraudsters'
behavior and doubled the incidence of new account fraud. The study also
found that many consumers who do not trust their financial institutions
are engaging in behavior that enables fraudsters to use their
information for 75 percent longer.
This Smart News Release features multimedia. View the full release here:
http://www.businesswire.com/news/home/20160202005580/en/
The annual 2016
Identity Fraud Study is a comprehensive analysis of identity fraud
trends, independently produced by Javelin
and made possible by LifeLock,
Inc., a leading provider of proactive identity theft protection
services for consumers. Now in its thirteenth consecutive year, it is
the nation's longest-running study of identity fraud, with 64,000
respondents surveyed since 2003.
The 2016 Identity Fraud Study found four significant trends:
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More identity fraud victims, less stolen - The number of
identity fraud victims was at its second highest level in six years,
but the amount stolen was at its lowest point in the past six years.
Identity fraud is a serious issue as fraudsters have stolen $112
billion in the past six years. That equals $35,600 stolen per minute,
or enough to pay for four years of college in just four minutes.
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EMV drives a doubling of new account fraud - In 2015 the U.S.
switched to EMV, which is designed to reduce in-person fraud and the
profitability of counterfeit card operations. Fraudsters have reacted
by moving away from existing card fraud to focus on new account fraud.
This drove a 113 percent increase in incidence of new account fraud,
which now accounts for 20 percent of all fraud losses.
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Consumer choices negatively impacting fraud detection - The
study found those consumers that do not trust their financial
institutions and do not take advantage of the services offered by them
are setting the stage for more damage if they become fraud victims.
The study found consumers that do not trust their financial
institutions are less likely to use transaction monitoring, email
alerts, credit freezes and black market monitoring. This results in
their information being used for 75 percent longer by fraudsters and
incurring a 185 percent greater mean consumer expense than those
victims that have high trust in their financial institutions.
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U.S. consumer data being used for fraud internationally -
Identity fraud is a global issue. The study found that 18 percent of
the identity fraud using U.S. cards, or $2.4 billion, was conducted
outside the U.S.. There was an average of $1,585 perincident,
although for most consumers there was no out of pocket cost as the
major issuers offer $0 liability. Issuers are doing a good job of
quickly detecting this type of fraud. They are proactively detecting
69 percent of these cases.
"Fraud is evolving at a frantic pace although the amount of fraud has
been relatively flat over the past four years. This just shows that when
the industry cracks down on one type of fraud, criminals quickly shift
their attack vector and area of operation," said Al Pascual, senior vice
president, research director and head of fraud & security, Javelin. "The
study this year reinforced that with industry, technology and consumers
working in concert, people can best fight back against the fraudsters.
The worst thing consumers can do is lose trust in their financial
institutions and stop playing an active role in working to detect fraud.
Taking a back seat will increase their risk and the damage that occurs
if they are fraud victims in the future."
Methodology
Identity fraud is defined as the unauthorized use of another person's
personal information to achieve illicit financial gain. Identity fraud
can range from simply using a stolen payment card account, to making a
fraudulent purchase, to taking control of existing accounts or opening
new accounts.
In 2015, Javelin conducted an address-based survey of 5,111 U.S.
consumers to assess the impact of fraud, uncover where fraudsters are
making progress, explore consumers' actions and behaviors, and identify
segments of consumers most affected by fraud.
Seven Safety Tips to Protect Consumers
Javelin recommends that consumers work in partnership with institutions
to help minimize their risk and impact of identity fraud. The following
is a seven-step approach for consumers to follow:
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Secure your mobile device - As consumers transition more of
their financial lives to smartphones and tablets, these devices have
become high-profile targets for both cybercrooks and thieves alike. To
help protect against criminals from getting their hands on valuable
personal information, apply software updates (patching known
vulnerabilities) as soon as they become available, and take advantage
of the security capabilities built into Android (News - Alert) and iOS devices, such
as protecting the device with a passcode or biometric (such as a
fingerprint), and the ability to encrypt and remotely wipe the
contents of the device in the event it is stolen.
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Exercise good password habits - Passwords have remained the de
facto first line of defense for most online accounts, which has
motivated criminals to compromise them whenever possible. Using
strong, unique, regularly updated passwords helps reduce the value to
fraudsters of passwords stolen in a data breach or through malware.
Password managers can provide a convenient way to manage good password
hygiene without resorting to writing them down, which could also place
them at risk of physical compromise.
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Place a security freeze - If you are not planning on opening
new accounts in the near future, a freeze on your credit report can
prevent anyone else from opening one in your name. Credit freezes must
be placed with all three credit bureaus and prevents everyone except
for existing creditors and certain government agencies from accessing
your credit report. While costs vary per state, typically each bureau
costs below $20. Should you need to open an account requiring a credit
check, the freeze can be lifted through the credit bureaus.
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Sign up for account alerts - A variety of financial service
providers, including depository institutions, credit card issuers and
brokerages, provide their customers with the option to receive
notifications of suspicious activity. These notifications can often be
received through email or text message, making some notifications
immediate, and some go so far as to allow their customers to specify
the scenarios under which they want to be notified, so as to reduce
false alarms.
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Take data breach notifications seriously - One in five data
breach victims suffered fraud in 2015, rising notably from one in
seven in 2014. While data breaches at retailers are an issue, the
number of data breaches at government agencies and healthcare
organizations grew dramatically in 2015. As a result, 64 percent more
Social Security Numbers were exposed this year, and there was a 110
percent increase in data on medical records made available to
fraudsters.
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Seek help as soon as fraud is detected - The more immediate a
financial institution, credit card issuer, wireless carrier or other
service provider are notified that fraud has occurred on an account,
the sooner these organizations can act to limit the damage. Early
notification can also help limit the liability of a victim in some
cases, as well as allow more time for law enforcement to catch the
fraudsters in the act.
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Be alert for international transactions - Some financial
institutions offer alerts for international transactions. Regardless
of whether they do so or not, you should always let your financial
institution know when you are planning to leave and return to the
country if you are crossing borders. This can serve the dual purpose
of preventing fraud while remaining home and preventing transactions
from being declined while you are overseas.
Additional Consumer Resources
For a free, easy-to-use identity fraud risk assessment, visit http://www.lifelock.com/risk-calculator
To learn more about how consumers can protect themselves, visit
LifeLock's (News - Alert) blog: https://www.lifelockunlocked.com
To report incidents of suspected fraud or identity theft, visit the FTC (News - Alert)
online at: http://www.ftc.gov/faq/consumer-protection/report-identity-theft
For a video of the 2016 identity fraud trends, visit: https://youtu.be/4MUL82B0Eng
For an infographic of the 2016 identity fraud data, visit: https://www.slideshare.net/JavelinMktg/identity-fraud-in-2015-131m-fraud-victims-but-less-stolen
About Javelin Strategy & Research www.javelinstrategy.com
Javelin Strategy & Research (@JavelinStrategy), a Greenwich Associates
LLC company, provides strategic insights into customer transactions,
increasing sustainable profits for financial institutions, government,
payments companies, merchants and other technology providers. Javelin's
independent insights result from a uniquely rigorous three-dimensional
research process that assesses customers, providers, and the
transactions ecosystem.
All trademarks are the property of their respective owners.
View source version on businesswire.com: http://www.businesswire.com/news/home/20160202005580/en/
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