ID Fraud Declines

Last fall, we learned that identity fraud is more of a low-tech than a high-tech crime. Now, there's some new evidence that ID fraud is on the decline overall. A new report suggests that financial losses from identity theft dropped 12% in 2007 to $45 billion, down from $51 billion in 2006.

This is great news, but the big question is: why? The report suggests that it's a combination of consumer awareness and organizational security. In other words, whether you're a programmer working on secure data systems and practices for the enterprise, or just a consumer of those data systems, you can pat yourself on the back.

Consumers have learned more about the problem in the last year, and have gotten more vigilant in monitoring their accounts. This has led to more early detection of fraud, and limited damages. Another trend is that consumers continue to adopt online account management and forgo paper statements. As we learned last fall, it's these paper statements that are far more dangerous than online account access. Fewer paper records mean that dumpster diving becomes less profitable, and everyone is safer.

But there are some dark clouds in the survey as well. While the overall cost of ID fraud has decreased, the damages per victim have risen. This makes sense: the harder you make it to commit the crime, the fewer amateurs will be successful. That just leaves the clever crooks. So you have fewer incidences of crime, but those remaining incidents are more carefully designed frauds, and so are more effective and profitable taken individually.

The other black lining in this silver cloud is that your safety from ID fraud depends on where you live. If you live in California, Idaho, Illinois, West Virginia or Delaware, you are more likely to be a victim of ID fraud than say, a resident of Alaska, Colorado, Louisiana or Maine.

Posted by Kevin Carlson at 12:55 PM  Permalink