Identity Fraud Reaches Record High Numbers
Identity fraud increased 16 percent in 2016 with a record 15.4 million Americans falling prey to one form of identity theft or another according to the new 2017 Identity Fraud Study from Javelin Strategy & Research. The total amount stolen in 2016 also increased to $16 billion dollars.
Card-not-present online fraud saw the biggest increase
The increases come mostly from online transactions also known as card-not-present fraud. In online card-not-present fraud there was 40 percent increase in thefts and out of pocket costs to the consumers were double the cost when compared to fraud involving point of sale transactions. Experts believe the spike in card-not-present online fraud is due largely to the new chip technologies which protect consumers more effectively during in-person purchases.
Account takeover fraud also increased
Account takeover fraud occurs when a thief hijacks an existing account. Account takeover frauds increased 61 percent in 2016 with victims paying an average of $263 which is five times higher than the average theft. The total amount lost in 2016 to account takeover fraud was approximately $2.3 billion dollars. There is no clear reason why account takeover fraud increased so dramatically but some experts believe the increase is the direct result of a lack of consumer oversight over their own accounts and the delays involved between purchases and billing statements being sent out which increases the amount of time before an account takeover theft can be detected. Unlike new account fraud, account takeover fraud cannot be detected by regularly reviewing your credit reports.
New account fraud
New account identity fraud also continues to plague American consumers and does not appear to be decreasing by any appreciable measure. In new account fraud identity thieves open new accounts in consumer’s names using information they either stole or purchased on the black market. Many of these new account theft cases go undiscovered for years until the consumer either learns of the theft through a review of their credit reports or when they are contacted by a debt collector seeking to collect the fraudulent debt.
Social networking fraud
The study also revealed that consumers who share their social life on digital platforms are at a much higher risk of account takeover fraud than consumers who are mostly offline or who are more private with their information. Social networks allow thieves access to contact information, information about friends and family, and updates on the daily lives of their victims. Some consumers even post travel plans online which allows identity thieves to add charges to an existing credit card or open a new account with less likelihood of being detected quickly.
The simple fact is that active social networkers are far more open about private information and are therefore more susceptible to fraud. The good news for social networking consumers is that, although they are more likely to be a victim of identity fraud, they are also likely to discover the theft more quickly than offline consumers.
Simplify identity fraud prevention
The average consumer does not need to hire a credit monitoring company or lock down their credit reports with credit freezes to prevent identity fraud. The most simple methods are often the most effective.
Start by using more discretion with providing information to strangers online. To be most effective, don’t share anything publicly. If you are going on vacation, just purchased a home, or have been shopping online recently, keep that information private. Identity thieves are masters of using information that seem harmless to access your accounts or open new accounts in your name. Don’t give them the chance.
Another proven method is to use a credit card for purchases rather than a debit card. That way, your losses are limited and theft can be detected more easily. Debit cards allow access to your entire account which can greatly increase any potential loss to identity fraud. If you insist on using a debit card rather that a credit card you can use multiple accounts to reduce your potential loss. Put a limited amount of money in the debit card account each week while keeping the bulk of your hard-earned money in a separate account. That way, the larger amount is protected and only the smaller account is at risk. Of course, nothing you do can prevent all forms of theft or identity fraud but diligent efforts will certainly reduce your risk and potential losses.