Understanding the current trends of identity theft can help you better protect your information during credit or financial transactions, and know where it may be at risk.

Identity theft has exploded in the last10 years, making it difficult to get accurate statistics to define its prevalence. Victimization estimates range from 8.9 to 9.91 million in 2006 Better Business Bureau (BBB) and Federal Trade Commission (FTC) surveys. However, these estimates represent decreased victimization by nearly a million since 2003.

Even with the decreases in identity theft victimization, the costs of identity theft-related fraud are dramatic. The loss due to identity theft related fraud by major credit card companies alone was $114.3 million in 2000. The FTC estimated costs to businesses and financial institutions combined were over $47 billion in 2003. Federal agencies like the Social Security Administration and the IRS have experienced increased complaints of SSN misuse and fraudulent tax filings, all of which raised investigation and consumer assistance costs to help those whose personal information was involved in fraudulent activity.

Overall, consumer losses due to identity theft were estimated at $56.6 billion in 2006. The Consumer Sentinel found identity theft to be the most expensive and highest-reported consumer fraud crime among all categories tracked at the federal level.

Identity theft-related crimes come in many forms. After personal information is stolen, it may be used in one of two ways. First, identity theft perpetrators obtain forms of credit not otherwise possible with their own information. Secondly, they can meet common needs that require stable personal documentation using stolen information. The Consumer Sentinel found the most widely-reported forms of credit or financial fraud due to identity theft included: credit card fraud (26%), bank fraud (17%), and loan fraud (5%). The most widely-reported crimes involving a perpetrator assuming a victim identity include utility/phone service fraud (18%), employment fraud (12%), and government documents/benefits fraud (9%).

The proliferation of internet-based activities is a suggested culprit for the explosive growth in identity theft. Electronic funds transfer fraud was the most frequently reported crime in 2005. E-commerce, online bill payment and other financial transactions continue to grow, while opinion varies as to how this will effect identity theft victimization.

Nonetheless, the BBB found that perpetrators obtained personal information in over 68% of identity theft surveyed. Even with the internet spurring identity theft-related fraud, geographic areas like Phoenix, AZ, Las Vegas, NV and Riverside, CA have been found to be centers for identity theft activity.

Overall, you can become an identity theft victim anywhere, whether on or offline. There is less of a chance of becoming a victim, but should it occur, it will be more costly than ever before. The crimes related to identity theft are more likely to involve credit or bank accounts; you should be more concerned about credit card and financial information being used in fraudulent activity, though personal information should be protected diligently as well.

See "How Identity Theft Occurs" for ways your information is illicitly obtained.



References

Federal Trade Commission Consumer Sentinel. Consumer Fraud and Identity Theft Complaint Data: January – December 2005

Privacy Rights Clearinghouse. How Many Identity Theft Victims are There? What is the Impact on Victims?

Stana, Richard. Identity Theft: Growing Prevalence and Cost