A new report finds that despite growing fears about identity theft and online fraud, of the victims that know the identity and method used by the criminal, these crimes are more frequently committed offline than online.

The 2005 Javelin Identity Fraud Survey Report -- released by the Better Business Bureau and Javelin Strategy & Research -- shows that Internet-related fraud problems are actually less severe, less costly and not as widespread as previously thought.

Further, the study concludes that those who access accounts online can provide earlier detection of crime than those who rely only upon mailed monthly paper statements. By managing their financial activities online, consumers can reduce access to personal information on paper bills and statements that may be used to commit identity theft and fraud.

Victims of identity theft who detected the crime by monitoring accounts online experienced financial losses that were less than one-eighth of those who detected the crime via paper statements. (Average $551 in losses when detected online vs. average $4,543 when detected from paper statements).

"Our numbers show that fears about online identity fraud may be out of proportion to the relative risk, causing consumers to ignore the most glaring issues," says James Van Dyke, Javelin's founder and principal analyst. "Indeed, most instances of identity fraud occur through traditional channels and are paper-based, not Internet-based."

The updated research project -- supported by CheckFree, Visa and Wells Fargo & Company and based on 4,000 telephone interviews with consumers -- makes four key points:

• The most frequently reported source of information used to commit fraud was a lost or stolen wallet or checkbook.

• Computer crimes accounted for just 11.6 percent of all known-cause identity fraud in 2004; and half of these digitally-driven crimes stem from spyware, software the computer user unknowingly installs to make ads pop-up when the consumer is online.

• Consumers can protect their financial data by using updated spyware, virus and firewall protection software and not responding to bogus "phishing" emails that request personal data.

Among cases where the perpetrator's identity is known, half of all identity fraud is committed by a friend, family member, relative, neighbor or in-home employee - someone known by the victim.

• A wide variety of metrics confirm that identity fraud problems are NOT worsening, with the total number of victims in decline.

• The annual dollar volume of identity fraud is highly similar to 2003 figures (adjusted for inflation) at $52.6 billion

• The number of identity fraud victims dropped from 10.1 million to 9.3 million in 2004 versus 2003

• The median value of identity fraud crimes remained unchanged at $750; however most identity fraud victims incurred no out-of-pocket costs.

• The average time to resolve an identity fraud crime dropped by 15%- from 33 hours in 2003 to 28 hours in 2004.

The majority of identity fraud crimes are self-detected. This reinforces the benefits of activity monitoring through electronic review of transactions, statements, and credit reports allowing consumers to check their account activities quickly and efficiently -- without waiting for a paper bill or statement.

Safety Tips

"This new research contradicts some common assumptions about identity theft fraud and points to new paths of prevention. There are several steps consumers can take to improve their identity safety and protect themselves against this type of fraud. An informed consumer is an empowered consumer," said Ken Hunter, president and CEO of the Council of Better Business Bureaus.

Prevent access to your personal information.

• Replace paper bills, statements and checks with Internet (paperless) versions

• Consider moving to an electronic bill payment service, such as your bank or biller's web site, and stop sending signed paper checks through the mail. Visit the site(s) to monitor account activity on a regular basis.

• Before discarding, shred all private documents

• Sign up for automatic payroll deposits

• Retrieve paper mail promptly and place outgoing checks or other sensitive documents in a U.S. Postal Service mailbox

• Keep passwords hidden (even in your own home) and change them frequently

• Don't discard a computer without deleting all sensitive data

• Use and regularly update firewall and anti-virus software

• Be suspiciously reluctant to release Social Security or account numbers, particularly to those requesting such information by e-mail or phone.

• When responding to e-mail, ignore any Internet links provided and type the full address instead

Detect unauthorized activity

• Review bank and credit card statements weekly and use online account access

• Contact your financial provider if you fail to receive statements in a timely manner

• Use e-mail-based account "alerts" to monitor transfers, payments, low balances and withdrawals

• Sign up to receive electronic bills and statements and, whenever possible select the option to turn off the paper copy of these sensitive documents

• Review your credit report at least annually (free annual reviews are being made available this year, in phases, depending on where you live)

Resolve fraud promptly, minimizing losses

• Ask your financial provider about zero-liability guarantees against fraud and dedicated resources to help you recover from any potential losses

• Victims of theft: notify your financial providers, begin monitoring your accounts more frequently, and place an "alert" through a credit bureau such as Equifax, Experian or TransUnion.