DoJ: Identity Theft Touches Millions in US

Based on interviews with 40,000 American residents, the Department of Justice (DoJ) has reported that 3.6 million — or about 3 out of every 100 — households were victimized by perpetrators of identity theft between July and December 2004. The numbers differ from earlier research findings and suggest that the incidence of identity theft might be lower than what has been reported in the past.

In 2003, 10.1 million American individuals were victims of identity theft, according to the Federal Trade Commission. In 2005, almost 9 million residents became victims, according to Javelin Strategy and Research.

The reports cover different periods, of course, but for the six-month period covered by the DoJ’s report, it would appear that fewer incidences of identity theft occurred than would be expected based on the FTC and JSR findings.

The differences most likely are the result of different data collection methods used.

The Justice Department’s Bureau of Justice Statistics (BJS) study covers “credit card thefts, thefts from existing accounts, misuse of personal information and multiple types at the same time.”

The BJS used a sample 10 times larger than the FTC did when conducting its survey, according to BJS statistician Katrina Baum.

“What we know about statistics is that the larger sample you have, the less variability you will have in your estimate,” she told the E-Commerce Times.

Types of Households

The BJS study “shows very clearly the trend and pattern that we have been seeing for the last few years,” said Jay Foley, co-executive director and founder of Identity Theft Resource Center.

The groups most likely to face identity theft are households headed by people ages 18 through 24, those in urban or suburban areas, and those who have incomes of US$75,000 or more, the BJS study says.

However, the variation between urban, suburban and rural is small; 4 percent, 3 percent and 2 percent respectively are victims. Race and ethnicity don’t affect the likelihood of becoming a victim.

One reason for the higher number of victims in the 18- to 24-year-old range could be that “they seem to be most unaware when identity fraud occurs, compared to the average. The misuse of their identity continues almost two months,” said Rubina Johannes, a research analyst with Javelin Strategy and Research.

Affected households lost an average of $1,290 due to identity theft, the study estimates, for a total loss of $3.2 billion during the six-month period. The estimates include loss reimbursements from credit card companies, insurance companies or other financial institutions.

Common Types of Identity Theft

The DoJ’s six-month findings show that 48 percent of the affected households encountered unauthorized credit card use.

Other methods of theft cited by the DoJ report:

security number — occurred in 15 percent of the cases; and

JSR’s Findings

According to JSR data, access to personal information in over half of reported fraud cases in its study was controlled by the consumer. For businesses, the two most common breaches were employees improperly accessing consumer information and fraudulent transactions, according to Johannes.

Most consumer fraud was the result of lost or stolen wallets, credit cards and checkbooks. “Friendly fraud” is the designation given to theft perpetrated by acquaintances.

Resolving an identity theft problem took about one month for one in five households, according to the study. One-third of respondents said they resolved their problems within a day.

Three out of 10 households discovered the theft by finding unfamiliar charges on their accounts — a strong indication that it pays to regularly monitor bank and credit card statements for unusual charges. Perpetrators typically accessed information through phishing, spyware, hacking, stolen mail or a fraudulent change of address, Johannes noted.

Taking Care

There are some measures consumers can take to protect themselves, Foley told the E-Commerce Times. These include shredding any documents that aren’t needed for official reports, such as filing an IRS tax return.

“Remove the Social Security Number from your wallet or purse, be leery of whom you share your information with, never give out personal information over the phone unless you made the call, and be aware of others within earshot when giving out personal information,” Foley concluded.