Identity Theft Rises but Resolution Times and Consumer Costs Plummet, According to ITAC-Sponsored Research

WASHINGTON--(BUSINESS WIRE)--Last year the economy helped drive up the number of identity theft cases and the overall cost of identity fraud, but consumers had lower out of pocket costs and resolution times fell 30% to 21 hours, according to the Javelin Strategy & Research 2010 Identity Fraud Survey Report, co-sponsored by ITAC, the Identity Theft Assistance Center.

“We sponsored this research because everyone – consumers, policymakers and businesses – need facts, not anecdotes, to fight identity theft effectively”

“We sponsored this research because everyone – consumers, policymakers and businesses – need facts, not anecdotes, to fight identity theft effectively,” said ITAC President Anne Wallace. “Understanding criminal methods and consumer behavior lets us hone tools and educational messages that work.”

The research also shows that financial services companies continue to excel in detecting fraud and alerting their customers. More than one-third of victims first learned about the fraud from their financial institution. “Faster detection translates into lower costs for consumers and faster resolution means less stress and anxiety for victims,” said Wallace. “We’re encouraged by these findings because ITAC and its members are committed to partnering with consumers and law enforcement to fight identity fraud.”

Javelin confirms that solutions like ITAC that integrate consumer protection and education into a boarder program to combat identity theft are the most effective. Only with such continued efforts can consumers stay one step ahead of fraudsters and protect their information – stopping fraud preemptively before it occurs or detecting it in real-time, the report states.

“Other industries like the health care community, which our research shows experienced a rise in health insurance information theft, should consider adopting the ITAC model to prevent fraud and help consumers resolve fraud when it does happen,” said James Van Dyke, president and founder, Javelin Strategy & Research.

The Javelin research also revealed a need for better consumer education for consumers ages 18 to 24: it takes young adults nearly twice as many days to detect fraud, compared to other age groups, and thus are fraud victims for longer periods of time. They are less likely to monitor accounts regularly and the least likely group to take advantage of monitoring programs offered by financial institutions. They are also more likely to be victimized by people they know.

”Small behavioral changes can pay big dividends when it comes to managing risk, whether it’s a parent telling young people not to share PIN numbers, a school offering free anti-virus spyware, or their bank providing anti-fraud services,” according to ITAC board member Debbie Ward, head of Risk Operations/Fraud Prevention Services at Wells Fargo. “Wells Fargo offers a free Hands on Banking money management program for all consumers featuring a special course for young adults on how they can protect themselves and their money.”

Going forward, ITAC will use the Javelin report as a roadmap to develop targeted educational messages to help groups that may be at risk of identity fraud. ITAC offers consumers these basic tips on reducing their risk:

Keep sensitive information from prying eyes. Request electronic statements, use direct deposit, don’t put checks in an unlocked mailbox. At home or at work, keep all personal and financial records in a locked storage device or behind a password. When someone requests your Social Security Number, ask if you can provide alternate information
Prevent online identity theft. Install software against viruses and spyware and keep it updated along with your applications and operating system. Never respond to urgent e-mail requests for personal or account information. Use unique, hard-to-guess passwords. Turn off Bluetooth and Wi-Fi when not in use.
Monitor accounts for suspicious activity. Monitor bank and credit card accounts weekly, via online, mobile, ATM or touch-tone banking. Sign up for fraud alerts to be sent to your mobile phone or e-mail account. Request a free copy of your credit report each year at www.annualcreditreport.com or 877-322-8228. If you receive a notice that your private records were involved in a data breach, take advantage of any free protection services that are offered and place a fraud alert on your credit report.
Contact your financial services company at the first sign of fraud. The Javelin research shows you can minimize the damage of identity theft by acting quickly to resolve it. Most financial services companies offer zero-liability protection for debit and credit cards.

About ITAC

ITAC, the Identity Theft Assistance Center, is a nonprofit coalition of financial services companies that display the ITAC logo to demonstrate their commitment to protecting customers from identity theft. ITAC’s victim assistance service – which has helped more than 65,000 consumers recover from identity theft – is available at no cost to the millions of consumers who have an account at an ITAC member company. Through its partner Intersections Inc., ITAC offers the ITAC Sentinel® identity management service (www.itacsentinel.com).