Mobile and Social Media May Increase Identity Theft

Instances of identity fraud rose 13 percent in 2011, according to a new report by Javelin Strategy & Research, which found that more than 11.6 million adults became a victim of identity fraud in the United States, while the dollar amount stolen held steady.

The report also took a quantitative look at consumer behavior and fraud and found consumers’ social media and mobile behaviors may be putting them at greater risk.

Identity fraud is defined as the unauthorized use of another person’s personal information to achieve illicit financial gain. In October 2011, Javelin Strategy & Research conducted an address-based survey of 5,022 U.S. consumers to identify important findings about the impact of fraud, uncover areas of progress, and identify areas in which consumers must exercise continued vigilance.

Less profitable for fraudsters

“While identity fraud incidence increased last year, it is becoming less profitable for fraudsters,” said James Van Dyke, president and founder of Javelin Strategy & Research. “Consumers, the financial services industry, law enforcement and government agencies are stopping fraud earlier and making new account fraud more difficult to perpetrate.”

But as more consumers use smartphones and other mobile devices, the potential for identity theft appears to rise. The study identified certain social and mobile behaviors that had higher incidence rates of fraud than all consumers.

For example, LinkedIn, Google+, Twitter and Facebook users had the highest incidence of fraud, although there is no proof of direct causation. The survey found that despite warnings that social networks are a great resource for fraudsters, consumers are still sharing a significant amount of personal information frequently used to authenticate a consumer’s identity.

Over-exposed

Surprisingly those with public profiles were more likely to expose this personal information. Specifically, 68 percent of people with public social media profiles shared their birthday information, with 45 percent sharing month, date and year; 63 percent shared their high school name; 18 percent shared their phone number; and 12 percent shared their pet’s name.

All are prime examples of personal information a company would use to verify your identity.

“Consumers must be vigilant and in control of their personal data as they adopt new mobile and social technologies in order to not make it easier for fraudsters to perpetrate crimes,” Van Dyke said. “Our survey found data breaches are increasingly putting consumers at risk. Consumers and organizations should always carefully and actively monitor accounts, but they should pay particular attention after an incident.”

Data breaches still pose biggest risk

While smartphone owners experience greater incidence of fraud - the survey found seven percent of smartphone owners were victims of identity fraud – data breaches remain the area of greatest risk.

Van Dyke says one likely contributing factor to the fraud increase was the 67 percent increase in the number of Americans impacted by data breaches compared to 2010. Javelin Strategy & Research found victims of data breaches are 9.5 times more likely to be a victim of identity fraud than consumers who did not receive such a data breach letter.