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FTC Finds 8 Million Identity Theft Cases

Costs, types of fraud vary widely

November 28, 2007    Spanish

Of those victims, 3.2 million experienced fraud or misuse of their existing credit card accounts, 3.3 million suffered fraud or theft from non-credit card accounts, and 1.8 million were defrauded when thieves stole their personal information to open new accounts in the victims' names, known as "new account fraud."

"Whether you're from Malibu or Manhattan, Tacoma or Tallahassee, no one is immune to identity theft," said Lydia B. Parnes, Director of the FTC's Bureau of Consumer Protection.

"The important thing is that people learn how to deter identity thieves, detect suspicious activity on their financial records, and defend against the crime, should it happen," she added.

The survey, prepared for the FTC by the Synovate polling and research firm, also looked at the costs of identity theft, finding that the value of goods stolen and the costs of recovering from the theft varied according to the type of fraud involved. Where the ID theft was limited to the misuse of existing accounts, the average loss was less than $500, although much higher losses were reported in some cases.

But when the fraud was extended to "new account fraud," the losses were much higher--the median value of goods and services obtained by the thieves was $1,350. Ten percent of new account fraud victims reported losses of $15,000 or more in goods and services, with the top five percent of victims reporting losses of $30,000 or more in goods and services.

Recovering from new account fraud was more time-consuming and costly to the victims as well. Ten percent of all victims reported out-of-pocket expenses of $1,200 or more. But for new account fraud, the top 10 percent of the victims incurred expenses of at least $3,000, and the top 5 percent incurred expenses of at least $5,000.

Thirty-seven percent of victims reported experiencing problems such as harassment by debt collectors, being unable to get loans, having their utilities cut off, being subject to a criminal investigation or civil suit, being arrested, and having difficulties obtaining or accessing bank accounts.

In cases of new account fraud, victims were more than twice as likely to report having one or more of these types of problems than when thieves misused only existing accounts, according to the survey.

The unfamiliar enemy

The survey also found that 84 percent of the identity theft victims polled did not know the thief, contradicting other studies that claimed the majority of identity theft crimes were committed by friends or relatives.

Sixteen percent claimed some personal knowledge of the thief in their case, with six percent of victims reporting a family member or relative as the thief, eight percent claiming a friend or neighbor, and two percent claiming a colleague on the job was the thief. The victims who reported knowing the identity of the victim were also more likely to identify how the information was taken than those who did not.

Thirty eight percent of the victims polled said the most trying part of the experience was dealing with authorities or agencies in order to get the effects of the theft reversed, including dealing with credit bureaus and lenders, and replacing credit cards and existing accounts.

The study was conducted through interviews with 4,917 people between March 27 and June 11, 2006.

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