Feeds

Credit crunch pushes US ID fraud to 8 year low

Hi, low silver lining...

Using blade systems to cut costs and sharpen efficiencies

US identity fraud losses fell sharply last year, bucking a long-running trend.

The number of fraud victims decreased 28 per cent in 2010 from 11 million to 8.1 million. The total value of fraudulent losses also fell from $56bn in 2009 to $37bn in 2010, according to an annual study by Javelin Strategy & Research. Javelin reports the figures for losses are the lowest it has seen in the eight years it has run the study.

The average fraudulent losses per victim also declined from $5,000 in 2009 to $4,600 in 2010.

Javelin reckons a significant drop in reported data breaches goes some way towards explaining the decline in identity fraud. Around 26 million records were exposed in 404 reported breaches during 2010, compared to 221 million records in 604 breaches during 2009.

More stringent checks by lenders to "authenticate users and determine credit risk" as well as improved consumer awareness of ID fraud risks and the use of account monitoring tools are also credited in the decline.

“Economic conditions also appear to have contributed to this year-over-year decline, as well as increased security measures and some significant law enforcement successes," said James Van Dyke, president and founder of Javelin Strategy & Research.

The market research outfit doesn't say this but we can't help thinking the credit crunch, while tough on small business and homeowners, has contributed towards pushing fraud losses down by making it more difficult to obtain loans or fresh lines of credit without rigorous check.

New account fraud, in which accounts are opened without the victim’s knowledge, resulted in losses of $17bn last year, the biggest single source of fraud. Existing card fraud declined by 38 per cent from $23bn in 2009 to $14bn in 2010. Fraudsters commonly carry out this type of fraud by either adding their name as a registered user on an account or changing the physical address of the account.

Fraud perpetrated by people known to victims, such as a relative or roommate, increased seven per cent last year, one of the very few categories to see an increase.

Javelin reports that the amount of fraud in retail environments is inversely proportional to the value of sales, a non-intuitive finding that means the fraud decreases as sales increase.

The study, based on telephone interviews with more than 5,000 US adults as well as online research, was sponsored by Fiserv, Intersections and Wells Fargo. ®

Boost IT visibility and business value

More from The Register

next story
Secure microkernel that uses maths to be 'bug free' goes open source
Hacker-repelling, drone-protecting code will soon be yours to tweak as you see fit
14 antivirus apps found to have security problems
Vendors just don't care, says researcher, after finding basic boo-boos in security software
Only '3% of web servers in top corps' fully fixed after Heartbleed snafu
Just slapping a patched OpenSSL on a machine ain't going to cut it, we're told
How long is too long to wait for a security fix?
Synology finally patches OpenSSL bugs in Trevor's NAS
Israel's Iron Dome missile tech stolen by Chinese hackers
Corporate raiders Comment Crew fingered for attacks
Roll out the welcome mat to hackers and crackers
Security chap pens guide to bug bounty programs that won't fail like Yahoo!'s
HIDDEN packet sniffer spy tech in MILLIONS of iPhones, iPads – expert
Don't panic though – Apple's backdoor is not wide open to all, guru tells us
Researcher sat on critical IE bugs for THREE YEARS
VUPEN waited for Pwn2Own cash while IE's sandbox leaked
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Application security programs and practises
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Securing Web Applications Made Simple and Scalable
Learn how automated security testing can provide a simple and scalable way to protect your web applications.