US identity fraud reaches record high in 2017
The number of identity fraud victims has increased by 8 percent (rising to 16.7 million U.S. consumers) over the last year, a record high since Javelin Strategy & Research began tracking identity fraud in 2003, according to a press release about the report.
The study found that despite industry efforts to prevent identity fraud, fraudsters successfully adapted to net 1.3 million more victims in 2017, with the amount stolen rising to $16.8 billion. With the adoption of EMV cards and terminals, the types of identity fraud continued to shift online and away from physical stores. The complexity of fraud is also on the rise as criminals are opening more new accounts as a means of compromising accounts consumers already have, according to the press release.
“Fraudsters are growing more sophisticated in response to industry’s efforts to implement better security,” Al Pascual, senior vice president, research director and head of fraud and security for Javelin Strategy & Research, said in the press release. “Fortunately, there are a variety of digital tools that consumers can leverage to stay better informed on the status of their identities and accounts, and to ultimately stay better protected.”
The study found the following:
- Record high incidence of identity fraud — In 2017, 6.64 percent of consumers became victims of identity fraud, an increase of almost one million victims from the previous year. This increase was driven by growth in both existing non-card fraud and account takeover.
- Account takeover grew significantly — Account takeover tripled over the past year, reaching a four-year high. Total ATO losses reached $5.1 billion, a 120 percent increase from 2016. Account takeover continues to be one of the most challenging fraud types for consumers with victims paying an average of $290 in out-of-pocket costs and spending 16 hours on average to resolve. This translates to more than 62.2 million hours of time consumers lost in 2017. That is enough time for more than three million people to binge watch the first and second season of Stranger Things.
- Online shopping presents the greatest fraud opportunity — EMV is driving more fraudsters to seek online channels for fraud. Card Not Present Fraud is now 81 percent more likely than point of sale fraud, the greatest gap Javelin has observed.
- Fraudsters are getting more sophisticated — Fraudsters are getting more sophisticated in their attacks and using more complex and difficult to detect monetization schemes. One-and-a-half million victims of existing account fraud had an intermediary account opened in their name first. This is 200 percent greater than the previous high.