ID Theft Declines, But Makes Low-Tech Migration

Identity fraud losses declined 12 percent in 2007, but phone and mail fraud schemes are skyrocketing as crooks continue to adopt more traditional offline scams. Those are some of the highlights coming out today from the 2008 Javelin Strategy & Research ID Theft report, one of the major industry benchmarks—which also includes the FTC’s periodic Consumer Sentinel report—that tracks fraud patterns and losses suffered by millions of U.S. ID theft victims each year.

Improved consumer online vigilance and the adoption of multi-factor authentication standards are among the factors noted by Javelin president in cutting down on fraud, although it may explain the jump in phone and mail fraud transactions that in 2007 accounted for 40 percent of ID theft activity, after being responsible for only 3 percent the year before.

The findings “reinforce” a three-year trend in which criminals are stealing personal information primarily through stolen personal belongings and phone calls, according to the report. “It’s very much multi-channel, both low-tech and new tech,” says Van Dyke.

Overall, victim numbers dipped to the lowest level in five years, down to 8.1 million people in 2007, compared to 8.4 million in 2006.

Overall fraud costs dropped from $51 to $45 billion and continuing a downward trend of losses that Javelin first tracked for 2006. Unfortunately for consumers, the drop in overall fraud is not reflected in per-incident expenses they had to pay up for stolen identities. That’s gone up 25 percent to $691 per episode.