Feeds

ID thieves rip off 7m US adults a year

So what are banks doing about it?

  • alert
  • submit to reddit

Choosing a cloud hosting partner with confidence

Seven million US adults,were victims of identity theft in the 12 months ending June 2003, according to Gartner. The analyst group is calling on banks to make it tougher for crooks to obtain credit in false names.

Gartner says its figures represent a 79 per cent increase in people affected by ID theft since its last survey in February 2002.

It takes issue with a common misconception about identity theft - that it's a Net crime perpetrated by anonymous, career criminals.

"Identity theft is not necessarily a high-tech crime, and can just as easily damage the credit reputations of low-tech adults who don't spend any time on the Internet," said Avivah Litan, vice president and research director for Gartner.

"More than half of all identity theft - where the method of theft is documented - is committed by criminals that have established relationships with their victims, such as family members, roommates, neighbours, or co-workers," said Litan, citing numbers published by the Federal Trade Commission.

With identity theft, a thief takes over a consumer's entire identity by stealing critical private information, such as the Social Security number, driver's license number, address, credit card number or bank account number. The thief can then use the stolen information to obtain illegal loans or credit lines to buy goods and services under the stolen name. Identity thieves typically change the consumer's mailing address to hide their activities.

"Many banks, credit card issuers, cell phone service providers and other enterprises that extend financial credit to consumers don't recognize most identity theft fraud for what it is," Litan said. "Instead they mistakenly write it off as credit losses, causing a serious disconnection between the magnitude of identity theft that innocent consumers experience and the industry's proper recognition of the crime. This causes a disincentive to fix the problem with the urgency it requires."

Without external pressure from legislators and industry associations, financial service providers (FSPs) may not have the sufficient incentive to stem the flow of identity theft crimes.

According to Gartner, consumers and lobbyists must press banks and other FSPs to wholeheartedly back efforts such as the US Fair Credit Reporting Act and BITS' Work on Identity Theft.

BITS, the Technology Group of The Financial Services Roundtable, was formed by the CEOs of the largest US financial institutions as the strategic "brain trust" for the financial services industry in the e-commerce arena.

The Fair Credit Reporting Act would cover security and accuracy of personal financial information and access to credit and financial services; BITS' initiative would make it easier for victims to report a crime to financial institutions.

"Most importantly, however, banks and FSPs must implement solutions that effectively screen for application fraud, so they don't wrongfully extend credit to identify thieves," said Litan. "Without industry prevention efforts, consumers whose identities have been stolen will continue to bear the brunt of social and indirect economic costs."

Additional information is available in two Gartner reports. These reports examine the rising trend of identity theft and what solutions are emerging in the market to prevent it.
Underreporting of Identity Theft Rewards the Thieves can be purchased on Gartner's Web site here. Identity Theft Fraud Prevention Solutions Start to Proliferate can be purchased on Gartner's Web site here. ®

Related Stories

ID theft: a $1bn a year crime
US arrests 130 in Net fraud crackdown
'Open and helpful community' - of credit card thieves
Smart credit card scheme kicks off in the UK

Internet Security Threat Report 2014

More from The Register

next story
FYI: OS X Yosemite's Spotlight tells Apple EVERYTHING you're looking for
It's on by default – didn't you read the small print?
Russian hackers exploit 'Sandworm' bug 'to spy on NATO, EU PCs'
Fix imminent from Microsoft for Vista, Server 2008, other stuff
Edward who? GCHQ boss dodges Snowden topic during last speech
UK spies would rather 'walk' than do 'mass surveillance'
Microsoft pulls another dodgy patch
Redmond makes a hash of hashing add-on
'LulzSec leader Aush0k' found to be naughty boy not worthy of jail
15 months home detention leaves egg on feds' faces as they grab for more power
China is ALREADY spying on Apple iCloud users, claims watchdog
Attack harvests users' info at iPhone 6 launch
Carders punch holes through Staples
Investigation launched into East Coast stores
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.
Three 1TB solid state scorchers up for grabs
Big SSDs can be expensive but think big and think free because you could be the lucky winner of one of three 1TB Samsung SSD 840 EVO drives that we’re giving away worth over £300 apiece.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.