Identity Fraud Rates Reach All-Time High
Last year marked a large shift in the world of data breaches. For the first time, Social Security Numbers were compromised more than credit card numbers. A staggering 16.7 million consumers were affected by identity fraud last year, an 8% increase over year-ago levels and the highest volume since Javelin Strategy & Research began their annual surveys in 2003.
This fraud resulted in losses of $16.8 billion.
It’s important to note the difference between identity theft and identity fraud. Identity fraud involves the theft of someone’s personal information for the purpose of financial gain, such as a data breach used to collect credit card numbers. Identity theft involves the collection of personal information without the financial element. A good example of this would be the Yahoo data breach, where fraudsters took usernames, passwords, and other account details but no payment information.
Identity theft is still concerning because it provides a gateway for identity fraud. The Javelin study revealed a strong increase in “intermediary account openings,” which are online accounts used as a middle man between the merchant and the payment method. PayPal is a notable example. Fraudsters can create these accounts with someone’s personal information and use them to transfer funds from stolen credit cards, or existing accounts in the person’s name.
The Javelin study found that card-not-present fraud is now 81% more prevalent than card present fraud, and a recent Radial study noticed a similar trend. However, as the Radial study indicated, the increase in card-not-present fraud may be from a general increase in online shopping in America.
What can you do about all of this? Be careful when giving out your personal information. If you have the option to use a two-factor authentication for your accounts, enable it. This makes it much more difficult for fraudsters to steal your information. Monitor your payment accounts closely for suspicious activity, and sign up for account alerts when possible. Take proactive and reactive steps to protect your personal information, and you can continue making purchases in the normal manner.