Identity Fraud: It's Here to Stay

Identity fraud seems like a far off nightmare that'll never happen to any of us. It's in the news stories, out to scare us into securing our accounts and devices. Don't take identity fraud lightly though; one of Javelin Strategy and Research's recent studies showed that it's on the rise and consumers should get proper protection before they find themselves victimized.

Identity fraud is the unauthorized use of another person's personal information to get illegal financial benefits. The number of victims has increased astronomically from 500,000 to 13.1 million consumers in 2013 alone, most victims between the ages of 35 and 44. Someone falls victim to identity fraud every two seconds.

Fraud Findings
It comes as no surprise that more fraud is happening online. Identity fraud doesn't include just credit card fraud anymore. Forty-four percent of all frauds involved online transactions with misused accounts on sites like Amazon and eBay, and email payment accounts. Non-card account takeovers like these have increased in the past two years by five percent, and phone account takeovers have nearly tripled. Fraudsters will add properties to victims' accounts and increase unauthorized charges by using "premium" texting services.

We all know that data breaches are one of the most frightening scenarios that can happen, just look at the recent Target and Neiman Marcus scares. It's with good reason data breaches should be feared; they can be more damaging than account takeovers. One in three people who get data breach notifications become a victim of fraud. Over 40 percent of consumers with breached debit cards are fraud victims, and 16 percent with breached social security numbers fall victim.

It's not all bad news though. The overall amount stolen from identity fraud has declined by three billion dollars from 2012 to 2013. This means that financial institution, identity protection providers, and perhaps most importantly consumers like us are taking aggressive action against these criminals.  

Being Proactive, Not Passive
Consumers can work with institutions to reduce the risk and consequences of identity fraud. To prevent identity fraud, keep your personal data private by securing personal and financial records with strong passwords or locked storage devices. Password managers, like our Editors' Choice LastPass 3.0, are good tools to generate and store strong passwords. Monitor your accounts, use secure and trusted Internet connections, and install up-to-date security software on all your devices.

It's also a good idea to use two-factor authentication when you can to add another layer of security to your accounts. Set up alert emails and monitor online bank accounts so you can detect identity fraud and prevent misuse. Take data breach notifications seriously and don't brush them off as false alarms. Monitor your accounts closely and be sure to put a fraud alert on your credit report. 

If you find yourself victim of identity fraud, immediately contact your bank, credit union, and wireless providers to secure your accounts with the companies' resolution and loss protections services. The faster you act, the more likely your losses will be reduced.  

Click on the image below to view the full infographic.