Thursday, April 26

Identity Theft

No, I haven't suffered from identity theft, but this issue caught my eye and it seems prudent for frugal minded people to give it some consideration. Also, since I'm plugging an affiliate link to the Lifelock identity theft prevention service I thought I'd provide some background detials.

Here are some facts from the 2003 Survey Report prepared for the FTC by Synovate:

  • 1.5 percent of survey participants reported that in the last year they had discovered that their personal information had been misused to open new credit accounts, take out new loans, or engage in other types of fraud, such as misuse of the victim’s name and identifying information when someone is charged with a crime, when renting an apartment, or when obtaining medical care ("'New Accounts & Other Frauds' ID Theft"). This result suggests that almost 3.25 million Americans discovered that their personal information had been misused in this kind of fraud in the past year.

  • Including all types of ID Theft, a total of 4.6 percent of survey participants indicated that they had discovered they were victims of ID Theft in the past year. This result suggests that almost 10 million Americans have discovered that they were the victim of some form of ID Theft within the last year.

  • 4.7 percent of survey participants reported that they had discovered that they were victims of "New Accounts & Other Frauds" ID Theft during the previous 5 years. 6.0 percent said that they had discovered that they were victims of the "Misuse of Existing Credit Cards or Card Numbers," while 2.0 percent indicated that they were victims of the "Misuse of Existing Non-Credit Card Accounts or Account Numbers." In total, 12.7 percent of survey participants reported that they had discovered the misuse of their personal information within the last 5 years.

  • On average, victims of "New Accounts & Other Frauds" ID Theft indicated that the person or persons who misused the victim’s personal information had obtained money or goods and services valued at $10,200 using the victim’s information. This result suggests that the total loss to businesses, including financial institutions, from this type of ID Theft was $33 billion in the last year.

  • Victims of ID Theft also spend a considerable amount of their own time resolving the various problems that occurred because of the misuse of their personal information. On average, victims reported that they spent 30 hours resolving their problems. On average, victims of the "New Accounts and Other Frauds" form of ID Theft spent 60 hours resolving their problems. This suggests that Americans spent almost 300 million hours resolving problems related to ID Theft in the past year, with almost two-thirds of this time – 194 million hours – spent by victims of "New Accounts and Other Frauds" ID Theft.

  • The ID Theft victim’s personal information is often misused for a substantial period of time. 13 percent of victims reported that their information was misused for 6 months or more. (For "New Accounts & Other Frauds" ID Theft, 27 percent of cases involved the misuse of the victim’s information for at least 6 months.)

  • Theft, including a lost or stolen wallet or pocket book or the theft of a victim's mail, was the most commonly mentioned way of obtaining the victim’s personal information. Approximately 25 percent of ID Theft victims reported that their information was obtained through such theft. Approximately one-half of ID Theft victims said that they did not know how the person who misused their personal information obtained it.
The good news is that it seems that consumers are not generally directly liable for losses incurred by the fraudulent actions of identity thieves. For full details, I recommend checking out the PDF file referenced above.

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