Is Identity Theft Becoming Less of a Problem?

According to a report in the New York Times, Javelin Strategy and Research released an annual survey showing a sharp reduction in incidents of identity theft.  In fact, their findings show a 28% decrease in the number of people who were victims of the crime in 2010 from 2009.  11 million people were victims in 2009 and just over 8 million were victims in 2010, which is the lowest number of incidents since Javelin started conducting their surveys in 2003.

So has identity theft become less of an issue?  “Absolutely not”, says Brian McGinley, SVP of Data Risk Management at Identity Theft 911.  “It’s not time to let down our guard.  It’s not time to breath a sigh of relief.”

Identity theft was the number one complaint to the Federal Trade Commission in 2009, and by a long shot.  21% of their complaints were specific to identity theft.  The closest to identity theft was “debt collectors” at just 9%.  The FTC has not released their 2010 consumer complaint statistics so it’s too early to tell whether or not Javelin’s findings are further confirmed with a reduction in consumer complaints to the FTC.  Their complaint numbers are due out in the next few weeks.

The Javelin findings also quantified the out of pocket losses for a fraud victim at $631 in 2010.  This is an increase of 60% from the 2009 figure of $387.  Javelin attributes the higher dollar amount to an increase in new account fraud, also called “true name” fraud.  This makes perfect sense as the cost involved with addressing the theft of an existing credit card is much less than the cost involved with addressing fraud on multiple new accounts.

Unfortunately, the news isn’t all positive.  Family and friends fraud, which is fraud perpetrated by someone close to you, increased 7% in 2010 over 2009.  Family and friends fraud is often the hardest to prevent because of their unusual access to personal information as well as the trust you place in them.

What’s an effective way for consumers to protect themselves from becoming victims of identity theft?  According to McGinley, “Checking financial accounts.  Fraud and information issues are all about the money.  Limit the availability of your name, address, Social Security Number and Date of Birth, especially its accessibility from a single source.  Also, identity thieves are using social networks as a way to backfill holes of missing consumer information.”

John Ulzheimer is the President of Consumer Education at SmartCredit.com, the credit blogger for Mint.com, and a Contributor for the National Foundation for Credit Counseling.  He is an expert on credit reporting, credit scoring and identity theft. Formerly of FICO, Equifax and Credit.com, John is the only recognized credit expert who actually comes from the credit industry.

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This post was written by John Ulzheimer