Identity theft is when someone else takes on your personal identity without your permission. This usually leads to identity fraud, where someone steals your identity for financial gain. In the past decade, the number of cases of identity fraud has exploded, as various factors have made it feasible to impersonate someone for the purpose of opening accounts in his or her name. Thanks to factors such as the internet as well as a marked increase in financial mail such as pre approved credit card offers, more and more criminals are taking this route in an attempt to gain easy money.
According to a survey by the Better Business Bureau and Javelin Strategy & Research, the number of victims of identity theft decreased from 2003 to 2005, with the number falling from 10.1 million to 9.3 million. Then, it decreased again to 8.9 million in 2006, however it seemed to bottom out in 2007 as an estimated 8.1 million people were victims of this crime. This number has bounced back to over 10 million in 2008, and part of this increase stems from the economic recession that began in 2008, as people commit more crimes when the economy is doing poorly.
The amount of money that is lost from identity theft is truly staggering. According to the Federal Trade Commission, between January and December 2007 consumers reported to the agency losses due to consumer fraud and identity theft of over 1.2 billion dollars. And this is just a small fraction of the total amount of money lost from this crime, as the number of cases this figure represents is only around 800,000. Compare this to the estimated 8.1 million people who were affected by identity theft that year, and one can see that the monetary cost is astronomical.
The most common form of identity theft is credit card fraud, according to the FTC. In 2007, this form of fraud made up 23% of the number of complaints, while phone or utilities fraud took second with 18%. Employment fraud and bank fraud were the third and fourth most common forms of identity theft, at 14 and 13 percent, respectively.
One statistic that has decreased, however, is the amount of pocket expense that consumers have to pay in order to rectify the damages from identity theft. Most credit cards now have identity fraud protection, which leads to no cost to the card holder. This protection system enables quicker detection of this fraud, which results in fewer charges. The average cost that someone must spend is $500, which is a significant decrease from several years ago.
But although more awareness of this felony has made it easier and less expensive for the victims to clear their names, identity theft remains a very serious crime that can ruin a person’s financial future if they’re not careful. Because of the downturn in the economy, more and more white collar criminals are turning to identity fraud as a way to support themselves, so consumers must be vigilant in protecting their personal and financial information.
