TELECOM Digest OnLine - Sorted: Identity Theft Losses Fall

Identity Theft Losses Fall

Jonathan Stempel (
Thu, 01 Feb 2007 21:09:45 -0600

By Jonathan Stempel

Americans lost about $49.3 billion in 2006 to criminals who stole
their identities, an 11.5 percent decline that may reflect increased
vigilance among consumers and businesses, a study released on Thursday

Losses declined from a revised $55.7 billion in 2005, according to the
third annual study by Javelin Strategy & Research. They had increased
in each of the prior two years.

The average identity theft fraud fell 9 percent to $5,720 from $6,278,
while the median -- where half were larger and half were smaller --
held steady at $750.

"Businesses are doing a better job screening, and consumers are doing
better at locking up information and monitoring their accounts," said
James Van Dyke, founder and president of Pleasanton, California-based
Javelin, in an interview.

"The dollar amount is dropping," he added, "but $49 billion is still a
lot of money."

According to the study, 8.4 million adult Americans, or one in 27,
learned last year that criminals committed fraud with personal data
such as credit card or Social Security numbers. That's down from 8.9
million in 2005 and 10.1 million in 2003.

Adults under 25, African-Americans, and people who make more than
$150,000 were among the groups most likely to suffer fraud, the study
said. The youngest adults were also among the least likely to take
steps to stop it, the study said.

Consumers on average spent $535 to clear up a fraud, though more than
half spent nothing, the study said. Many businesses excuse customers
from liability for certain frauds.

Results were based on a phone survey last fall of 5,006 people,
including 469 who said they were fraud victims.

The survey was sponsored by Wells Fargo & Co., the fifth-largest U.S.
bank; Visa, the credit card association; and CheckFree Corp., which
makes bill paying software.

Notwithstanding the apparent decline in fraud, security experts say
identity theft remains a big problem, as scammers try to stay one step
ahead of consumers and businesses.

Some are fighting back. U.S. regulators, for example, ordered banks by
the end of last year to require a second form of identification before
letting many customers transact online.

Yet security breaches still occur. In January, TJX Cos., which owns
clothing discounters T.J. Maxx and Marshalls, reported a breach that
analysts said might have exposed millions of people's personal data.

"We think consumers need improved ability to monitor and customize
account information, especially as transactions move increasingly to
the Internet and mobile devices," Van Dyke said.

Experts urge consumers not to divulge personal data in response to
unsolicited e-mails or callers.

They also suggest that consumers notify financial services providers
and file "fraud alerts" with the Equifax, Experian and TransUnion
credit bureaus if they suspect identity theft.

Copyright 2007 Reuters Limited.

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