Study finds identity fraud hitting record high

Identity fraud is at an all-time high, and despite industry efforts, fraudsters continue to rack up victims.

 

According to the 2017 Identity Fraud Study, the number of victims increased by 16%, rising to 15.4 million U.S. consumers in the last year — a record high since Javelin Strategy & Research began tracking identity fraud in 2003. 

 

Worse, fraudsters successfully added two million more individuals to their list of victims in 2016. The amount fraudsters took, which increased by nearly $1 billion dollars, totaled $16 billion, according to the study, which analyzes identity fraud trends.

 

While incidence of fraud at the point-of-sale (POS) remained essentially unchanged from 2014 and 2015 levels, there was a resurgence in existing card fraud in 2016, which included a 40% increase in card-not-present (CNP) fraud. The increase in EMV cards and terminals was a catalyst for driving fraudsters to shift to fraudulently opening new accounts. 

 

Fraudsters have clearly become better at evading detection, but on a positive note, consumers with an online presence are getting better at detecting fraud quicker. These efforts result in less loss overall per attempt. Many new-account fraud (NAF) victims are more likely to discover fraud through review of their credit report (15%), the study said.

 

However, there is still plenty of work to be done. After reaching a low point in 2014, both account takeovers and losses rose notably in 2016. Total account takeover losses reached $2.3 billion, a 61% increase from 2015, while incidence rose 31%. Account takeover continues to be one of the most challenging fraud types for consumers with victims paying an average of $263 out of pocket costs and spending a total of 20.7 million hours to resolve it in 2016 – 6 million more than in 2015, data revealed.

 

“After five years of relatively small growth or even decreases in fraud, this year’s findings drives home that fraudsters never rest and when one area is closed, they adapt and find new approaches,” said Al Pascual, senior VP, research director and head of fraud & security, Javelin Strategy & Research. 

 

“The rise of information available via data breaches is particularly troublesome for the industry and a boon for fraudsters,” he said. “To successfully fight fraudsters, the industry needs to close security gaps and continue to improve and consumers must be proactive too.”