There were 500,000 fewer victims of identity fraud in 2006 and the total amount of fraud was down by 12 percent, or $6.4 billion overall, according to a recently released survey.
Conducted by Javelin Strategy & Research, which focuses on the payments and financial services industries, the 2007 Identity Fraud Survey Report contains two key findings:
- There was a significant reduction in fraudulent new account openings using a person’s private information, traditionally one of the most common types of fraud; and,
- More fraud occurred in traditional physical channels, such as in-person transactions and by the direct theft of personal data by individuals, as opposed to an online environment.
The survey said that new account fraud dropped from 1.5 percent of all respondents in 2006, to 1 percent in 2007. And when fraudulent accounts were opened, many victims caught the fraud more quickly utilizing online channels -- resulting in average fraud amounts dropping from more than $10,000 a year ago, to $7,260 on average.Young adults between the ages of 18 and 24 are at the greatest risk for identity fraud -- because they are least likely to implement safeguards such as shredding documents and using antivirus software and firewalls. The overall adult population of the United States reported a fraud rate of 3.7 percent, while those younger adults reported a greater incident rate of 5.3 percent. Additionally, more than half of these victims reported knowing the perpetrator, compared to just 23 percent for overall respondents.
Americans earning less than $15,000 are least likely to be victims, but take the longest to uncover fraud when it occurs -- misuse of identity lasts twice as long compared to higher income brackets, and only 2.8 percent of victims report cases of abuse. Americans with incomes of more $150,000 are the most likely to be victimized (7.3 percent reported cases of abuse).
Javelin said that factors contributing to the decline include better consumer education and awareness, and the increased usage of online banking and financial sites that allow individuals to more frequently monitor their accounts.
The report, based on a sample size of 5,000 October 2006 telephone interviews with consumers, was produced by Javelin and co-sponsored by CheckFree, Visa and Wells Fargo & Co.
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