Sunday, February 17, 2008

Is identity theft on the rise, or declining?

(Sign above DMV trash can in LA courtesy of willnorris at Flickr)

Identity theft is making the news again with the FTC's release of their statistics for 2007.

From the press release:

The FTC today released the list of top consumer fraud complaints received by the agency in 2007. The list, contained in the publication “Consumer Fraud and Identity Theft Complaint Data January-December 2007,” showed that for the seventh year in a row, identity theft is the number one consumer complaint category. Of 813,899 total complaints received in 2007, 258,427, or 32 percent, were related to identity theft.
Broken down a little further, the report stated that credit card fraud was the most prevalent form of identity theft (23 percent). Utilities and employment fraud followed at 18 percent and 14 percent respectively. Bank fraud was at the bottom of the big 4 at 13 percent.

I found it interesting that utilities fraud and employment fraud ranked in the top four identity theft complaints. Maybe starting to hold employers accountable to match a social security number to an actual name is starting to take a toll on the statistics? In the past -- anyone has been able to use any SSN for employment purposes -- even if the number was made up out of thin air.

Enforcement of no match social security numbers is currently being held up in federal court, but a few States are already taking matters into their own hands.

It’s going to be interesting to see how much of an effect this has on identity theft if full enforcement is implemented. There are a lot of people, who believe the problem of illegal immigration is primarily caused by the people hiring them to hold down their labor costs.

In the current FTC report, Arizona came out #1 in identity theft (again) and is one of the States taking matters into their own hands.

So far as utilities fraud, I remembered a series of conversations I had with Suad Leija and her husband. In case you've never heard of Suad -- she is the stepdaughter of one of the main players of a counterfeit documents cartel -- who has been assisting the government in identifying and going after members of the cartel. Saud told me that in the world of counterfeit documents, utility bills are considered feeder documents. Feeder documents are used by people to establish more legitimate identities, which is normally the goal of people, who need to establish an identity other than their own.

I tried to find something in the current report about this, but I couldn't find anything that suggested why one category was higher than another.

In all fairness -- with all the financial crimes stemming from identity theft and all the crime that hides itself in illegal immigration -- it's extremely difficult to track any of the categories to a particular reason. With all the variables, identity theft isn't a very transparent subject.

There are a lot of people writing about the report. Martin Bosworth (Consumer Affairs) added some telling commentary that supports the contention I made in the above paragraph that the reasons behind identity theft aren't always very transparent.

The agency offered a caveat in its report that the data was not from a survey, but from unverified self-reported complaints.
Martin also commented on something, I also noted that was inconsistent for those of us, who follow the identity theft phenomenon:

The FTC's surveys and complaint reports have acted as a counterpoint to claims from the financial industry that identity theft and related fraud are on the decline. A new survey released by Javelin Research & Strategy, and funded in part by Visa, claimed that identity theft dropped by 12 percent from previous years, even as costs of individual cases rose to $691 per affected victim.
The dollar amount seems inconsistent between the two reports, either. Javelin says it is $691 per incident and the FTC states the cost is $349.

Whatever report you want to believe, the fact remains that identity theft continues to be a problem and I strongly suspect we have a long way to go before it no longer is an issue.

FTC press release, here.

Full report, here.

The FTC also has some great free resources for people, who want to learn more, or recover from identity theft:

FTC's Identity Theft

OnGuard Online

Fraud: Recognize It. Report It. Stop It.

1 comment:

Anonymous said...

Reports on fraud show that the government and banks should realise that their data protection and Chip and PIN systems are failing to deter fraudsters.

This show that fraud will continue to grow until they exploit ID KEY system described on website to make signature and PIN systems reliable and foolproof.

Fake documents have made our signature system unreliable while skimmers and pin-hole cameras etc. have made PIN system unreliable. We have option to make signatures reliable by personalising them with ID stickers and option to use Card Key Code to make PIN system reliable to make use of stolen and skimmed cards meaningless. By ignoring to exploit this system banks are only letting fraud crimes grow.

ID KEY system will eliminate the need for us to protect our personal and card details since fraudsters will be deterred from misusing these stolen details.

Proposed ID KEY can be treated as a reliable international ID card because it will personalise signature and PIN number to only the right individuals in any country.