Earlier this year the Javelin Strategy & Research group released the findings of their study on Identity Fraud in the US. While some of their findings were to be expected, other areas came as a bit of a surprise. When making efforts to fight fraud, it is vital to call upon this information to see where the problem lies in order to take protective measures.
Revealing Figures on Identity Fraud
According to the study, almost 13 million people were the victims of identity fraud in 2014 and a total of $16 billion was stolen as a result. Every two seconds another consumer falls victim to identity fraud and the odd bit of information coming out is that the largest group vulnerable to fraud is students. The majority of this money was then used to buy designer trinkets like Chanel bags and Hugo Boss watches, either because the criminals operate on a small scale, or because these items have an intrinsic worth and can be used to launder the money. Data breaches was the number one area of concern for the year, which came as no surprise based on news being reported throughout the year.
New Account Fraud at a Record Low
Surprisingly, the report indicated that ‘New Account Fraud’ was at a record low, so this did offer some amount of encouragement to merchants hit hard by this problem. New Account Fraud is when accounts are fraudulently set up in another person’s name without their knowledge or permission. Identity theft has been a huge problem in the past so when statistics show that there is a decline in fraudulent new accounts, consumers can begin to feel some amount of relief.
Consumers Notified of Breaches Reluctant to Shop
The study further revealed that as many as 66% of the victims of identity fraud had been previously notified in the same year, 2016, that there had been a data breach. Although they had been notified, their information was still compromised and resulted in new accounts being opened in their names. According to Sean Trundy, CEO of Fraud Fighter, “More aggressive security measures are needed to guard against this type of criminal activity. We have developed and instituted highly effective identity verification systems at fraudfighter.com so that businesses and consumers alike can rest assured their data will remain secure.”
How to Prevent Identity Theft
Each year cyber criminals are getting more and more technologically savvy. The average business and/or consumer just doesn’t have the knowledge or expertise to guard against identity theft. Key ways to prevent this problem include:
- Authentication of identity documents
- Images of documents captured
- Use of barcodes, mag-strips and RFID chips
- Standardizing forms
Alongside these measures, it is necessary to implement counterfeit detectors so that the integrity of documents can be assured. Without protective measures in place, identity fraud will continue to rise not only in the United States but will remain a global epidemic as well.
United Nations on Cybersecurity
The problem of identity fraud is so prevalent around the globe that the United Nations has chosen to speak out on the matter. They call it an issue of global proportions that demands an approach that is global. In 2012 they noted that some 431 million people fell victim to cyber theft around the globe and although they have not updated their figures in the past three years, by some estimates, that figure has more than doubled. In response to a need, the UN has established the United Nations Economic and Social Council special event Cybersecurity and Development which was jointly organized with the Department of Economic and Social Affairs.
Rooting out the Cause of Cyber and Identity Theft
Never was it more evident that extra protection was needed in developed countries such as the US and the UK because undeveloped and developing nations could become a safe haven for cyber criminals. Bearing in mind that identity fraud is largely due to data breaches through the Internet, it is imperative for businesses and governments to implement measures to safeguard data to ensure against security breaches. Even Democratic presidential hopeful Hillary Clinton has been the focal point of a recent ‘data breach’ controversy, so no one is immune to this ongoing problem.
Although some aspects of the study showed positive improvements, there is a long way to go before fraud is no longer an issue. If you are a business that has lost money in the past to fraudulent accounts, it is time to take action before further revenue is lost. Consumers want to know that their financial and personal information is safe so the more stringent your efforts to safeguard data, the more consumers will begin trusting their accounts with you. There is some ray of light at the end of the tunnel, but the problem is far from resolved.