Protect Against Identity Theft
Identity fraud decreased recently. Approximately 8.1 million Americans, or 3.5% of the total U.S. population, learned that they were victims of identity fraud in 2016. This crime affected 3 million fewer people than in 2009. At $37 billion, the annual overall fraud amount was at its lowest point since the survey began in 2003.
Although the number of incidents of identity fraud has dropped and there are fewer victims, the remaining frauds are more difficult to detect and resolve, resulting in higher consumer costs. Average (mean) consumer costs in 2010 were at $631, their highest level since 2007, although the median consumer cost remained at $0. Consumer costs are any out-of-pocket expenses suffered by the fraud victim, including unreimbursed monetary losses, and lost wages as a result of time spent to resolve the fraud as well as any related legal costs and credit monitoring costs.
Because of the zero-liability fraud protection offered by the majority of banks and card issuers, most victims will have to pay out-of-pocket expenses only to cover their time in resolving fraud, not to reimburse fraudulent charges. The average time to resolve identity fraud in 2010 rose to 33 hours, up 12 hours from 2009. Resolution times are now at their highest point since 2005 when they were at 40 hours.
A major reason for the rise in consumer costs and resolution times is explained by the relative rise in new account fraud. New account fraud is now responsible for almost half of the total dollar amount lost to identity fraud (46% in 2010 vs. only 38% in 2009). New account fraud on average takes longer to detect and results in higher mean consumer costs than other types of fraud, such as existing account fraud and non-card fraud. This is partly because new account fraud typically requires a credit report or use of a credit monitoring service to detect; thus, stopping the fraud requires teamwork between consumers and businesses.
The longer identity fraud goes undetected, the more expensive and difficult to resolve it tends to be for the consumer. Therefore, it is vital for consumers to monitor their accounts frequently and to partner with their financial institutions to help prevent, detect and resolve fraud. About half of identity frauds are detected by consumers, and half are detected by third parties (45% vs. 55%). Banks, credit unions and credit card issuers detect more identity fraud but often need the cooperation of their customers to stop incidents quickly.