The just-released 2016 Javelin Strategy and Research annual identity fraud study found that 13.1 million consumers fell victim to identity theft fraud in 2015, which represents the second highest level of victims in the last six years.
According to Javelin Strategy, identity theft criminals “have stolen $112 billion in the past six years, which equals $35,600 stolen per minute, or enough to pay for four years of college in just four minutes.” The report also talks about how the new EMV chip-and-pin credit card is increasing the incidence of new-account fraud – something I wrote about in this column last July.
Here are three major highlights from this year’s report:
- EMV drives a doubling of new-account fraud. In 2015, the U.S. switched to EMV, which is designed to reduce in-person fraud and the profitability of counterfeit card operations. Fraudsters have reacted by moving away from existing-card fraud to focus on new account fraud. This drove a 113 percent increase in incidence of new account fraud, which now accounts for 20 percent of all fraud losses.
- Consumer choices negatively impacts fraud detection. The study found those consumers who do not trust their financial institutions and do not take advantage of the services offered by them are setting the stage for more damage if they become fraud victims. The study found consumers who do not trust their financial institutions are less likely to use transaction monitoring, email alerts, credit freezes and black-market monitoring. This results in fraudsters using their information for 75 percent longer and incurring a 185 percent greater mean consumer expense than those victims who have high trust in their financial institutions.
- U.S. consumer data is used for fraud internationally. Identity fraud is a global issue. The study found that 18 percent of the identity fraud using U.S. credit cards, or $2.4 billion, was conducted outside the U.S. There was an average of $1,585 per incident, although for most consumers there was no out of pocket cost as the major issuers offer zero liability. Issuers are doing a good job of quickly detecting this type of fraud. They are proactively detecting 69 percent of these cases.
And if the Javelin report is not enough, the Federal Trade Commission will be releasing its annual Consumer Sentinel Network report in a few weeks highlighting how identity theft is the No.1 consumer complaint for the 16th consecutive year. Last week, the FTC reported a 47 percent increase in identity-theft complaints from 2014 to 2015. The FTC also said that taxpayer ID theft and refund fraud is “the largest and fastest growing ID theft category” and that taxpayer ID theft and refund fraud was the primary reason for the increase.
Mark’s most important: Consumers can help protect themselves by using strong passwords and account alerts with their financial institutions and credit card companies.
This article was originally published on AZcentral.com and republished with the author's permission.