Identity Fraud Hit Record Highs in 2016
The number of identity fraud victims hit a record high of 15.4 million U.S. consumers in 2016, a 16% increase, according to the 2017 Identity Fraud Study released today by Javelin Strategy & Research. The amount stolen in these attacks rose by nearly $1 billion to $16 billion.
The study also found card-not-present (CNP) fraud increased 40% last year, and that EMV cards may be driving criminals to open new accounts fraudulently. However, there is some good news. While fraudsters may becoming smarter at evading detection, consumers are getting better at detecting fraud, which has led to a lesser amount stolen per attempt.
The 2017 Identity Fraud Study, which is in its 14th year, found these four significant trends:
- In 2016, 6.15% of all consumers became victims of identity fraud, which marks an increase of two million people from 2015. The number of incidents increased by 16% from 2015, which is the highest rate of incidents since Javelin began tracking identity fraud in 2003.
- Due to an increase in EMV terminals and a growth in e- and m-commerce, many criminals are moving online, which led to a 40% increase in CNP fraud.
- Account takeover (ATO) incidents and losses, which hit a record low in 2014, were once again on the rise in 2016. ATO incidents rose 31%, and losses increased 61% last year. On average, ATO victims paid $263 out-of-pocket costs and collectively spent 20.7 million hours resolving these issues in 2016, which is six million more than in 2015.
- New-account fraud (NAF), which is when criminals open an account in someone else’s name, are on the rise. Since fraudsters are becoming better at avoiding detection, most victims discover the fraud by reviewing their credit report (15%) or when a debt collector contacts them (13%).
“After five years of relatively small growth or even decreases in fraud, this year’s findings drives home that fraudsters never rest and when one areas is closed, they adapt and find new approaches,” said Al Pascual, senior vice president, research director and head of fraud & security at Javelin Strategy & Research. “The rise of information available via data breaches is particularly troublesome for the industry and a boon for fraudsters. To successfully fight fraudsters, the industry needs to close security gaps and continue to improve and consumers must be proactive too.”