Security Watch | Matt Hines » ID theft on the decline

February 12, 2008 | Comments: (0)

ID theft on the decline

TAGS: Security

Even with a robust underground market for stolen personal data being fed by a seemingly endless stream of data leakage events and electronic crimes, new research indicates that incidents of identity theft actually dropped in sheer volume during 2007.

According to the 2008 Identity Fraud Survey Report released by Javelin Strategy & Research, identity fraud fell by an estimated 12 percent in the U.S. during 2007, compared to 2006, representing a reduction of $6 billion in the amount of money stolen through such scams.

Based on the company's estimates, drawn from interviews with 5,000 individual consumers, some 300,000 fewer adults were victimized through identity fraud in 2007 than in 2006. The report projects the total annual cost of identity fraud in 2007 at $45 billion, down from $51 billion last year.

The findings actually reinforce previous iterations of the report, as the number of people affected by ID fraud has dropped significantly since Javelin began conducting the research in 2004.

According to the firm, roughly 4.25 percent of the adult population of the U.S. was hit with ID fraud during 2004. In 2007, only 3.58 percent of adults were targeted by the crimes.

Javelin contends that factors contributing to the decline in ID fraud attacks include far greater public awareness of the problem, and improvements being made among businesses that hold large amounts of sensitive consumer data. As even more work to stay abreast of the issue is completed, the research firm said that it expects the fraud reduction to continue, although likely at a slower pace.

Despite the seemingly positive evidence about the drop in the overall popularity of ID fraud, the dark side of the report is that those individuals who are being victimized by the schemes are getting fleeced for more of their funds.

According to the report, the cost per consumer for ID fraud, derived by estimating all the money individuals lost and spent while being attacked and attempting to regain their credibility, rose significantly during 2007.

The cost per consumer in 2007 averaged $691, an increase of 25 percent, over the figure of $554 reported in the 2006 report.

"The 2008 Report confirmed what we believe to be true: that while fraud is declining, it is still a concern for the American public," James Van Dyke, president and founder of Javelin, said in a report summary. "The good news is the leadership role many businesses are taking in educating consumers about ID fraud risk factors is paying off. Still, fraudsters are getting creative and leveraging new techniques to commit fraud, so Americans need to be as diligent as ever in protecting their personal information."

The report also contends that while phishing, keystroke-logging malware and other common forms of electronic ID theft still represent the lion's share of incidents that attackers are also turning to older channels, namely the mail and the telephone, to carry out more of their scams.

IDs stolen via mail and telephone transactions grew from 3 percent of incidents in 2006 to 40 percent in 2007.

The most common tactic method used by fraudsters to that end was so-called "vishing," which involves the use of voice over Internet protocol (VoIP) and other phone systems to cull information from targets.

Rather than trying to trick someone into visiting a fake Web page to enter their personal data, instead schemers simply call people up and pretend to be their banks, or other types of businesses, and convince them to share sensitive information.

The report also uncovered a regional aspect to ID fraud, with attacks less frequent on people living in the Northeast U.S., while residents of California, Delaware, Idaho, Illinois and West Virginia are at the highest risk.

Posted by Matt Hines on February 12, 2008 01:36 PM

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