2014 Brought $16 Billion In ID Theft Fraud

$16 billion was stolen from 12.7 million identity fraud victims in 2014 — and that was an improvement, according to a Javelin Strategy study released on Tuesday (March 3).

Despite the number of high-profile data breaches last year — including cyberthefts at retailers Home Depot, Staples, Neiman Marcus and Michaels, as well as JPMorgan Chase — actual fraud losses by dollar amount actually dropped 11 percent from $18 billion in 2013. The number of victims dropped too, edging down 3 percent from 13.1 million in 2013, the survey of 5,000 U.S. adults found — and two-thirds of the victims had already received a data-breach notification.

Better still, instances of new-account fraud hit a record low last year. That’s the term for cases where a fraudster uses stolen information to open an account in a victim’s name without their knowledge, and it’s one of the most damaging types of fraud. However, the study also found that victims of new-account fraud are three times more likely to take a year or more to discover the fraud, compared with other types of fraud, because most consumers don’t actively monitor their credit reports.

Unfortunately, 2015 has already seen an uptick in new-account fraud, largely because that’s one of the few effective ways of compromising Apple’s mobile payment system, Apple Pay.

The study also found that, among several demographic segments analyzed, students were the least worried about fraud happening to them — almost two-thirds (64 percent) said they were not very concerned about fraud, and students were the group that was least likely to detect identity fraud themselves.

But students were also more likely to say they experienced moderate or severe impact when they were hit by fraud. Almost a quarter (22 percent) of students who were victims of identity fraud were notified either by a debt collector or when they were denied credit — a proportion three times higher than average fraud victims.

And among fraud victims in general, 28 percent said they avoided merchants after the fraud occurred, including big-box retailers. Individuals whose credit or debit cards were exposed in data breaches in 2014 were almost three times more likely to become identity fraud victims, according to the study.