Fraudsters stole $16 billion from 12.7 million US consumers last year—no small thing in the grand scheme of financial cybercrime. That means that there was a new identity fraud victim every two seconds in 2014.
According to Javelin Strategy & Research, 2014’s numbers mark a decline of 11% from 2013, when identity fraud totaled $18 billion. Javelin’s 2015 Identity Fraud Study found that the number of victims of identity fraud decreased overall by 3% in the year, from 13.1 million in 2013 to 12.7 million in 2014.
The firm, however, pointed out that an incremental decrease in victims doesn’t tell the whole story. Fraud can range from simply using a stolen payment card account, to making a fraudulent purchase, to taking control of existing accounts or opening new accounts—and have varying impacts.
For instance, victims of new account fraud are three times more likely to take a year or more to discover that their identities were misused compared to other types of fraud.
Account fraud happens when someone opens an account in a consumer’s name that they are not aware of—and it hit a record low in 2014. But follow-on attacks such as using existing non-card accounts are common, and this can open the door for fraudsters to be able to use the victim’s identity for illicit behavior for a long period of time. In turn, that can result in greater harm to consumers in the form of financial losses, and problems with their credit history and scores.
2014 also famously saw a significant amount of data breaches, most notably from retailers Neiman Marcus, Home Depot, Staples and Michael’s, as well as financial institution JPMorgan Chase. And they had a significant impact on identity fraud. The study found that two-thirds of identity fraud victims in 2014 had previously received a data breach notification in the same year.
Breaches also had a great impact on consumer purchasing decisions, with 28% of fraud victims saying they avoided merchants post-fraud. Notably, individuals whose credit or debit cards were breached in the past year were nearly three times more likely to be an identity fraud victim.
Among several demographic segments analyzed, students indicated the least amount of concern about fraud occurring, with more than 64% saying they were not very concerned about it. Yet, this same group is more likely to perceive significant effects due to the occurrence of fraud (15% experiencing moderate or severe impact).
Students are also the least likely to detect identity fraud themselves. In fact, 22% of students were notified that they were a victim of identity fraud either by a debt collector or when they were denied credit, three times higher than average fraud victims. Students are also four times more likely to be victims of “familiar” fraud, versus all other consumers.
“Despite the headlines, the occurrence of identity fraud hasn’t changed much over the past year, and it is still a significant problem,” said Al Pascual, director of fraud and security at Javelin Strategy & Research, in a statement. “Consumers, financial institutions and retailers are all taking aggressive steps, yet we must remain vigilant. The criminals will continue to find new ways to commit fraud, so taking advantage of available technology and services to protect against, detect and resolve identity fraud is a must for all individuals and corporations.”