Home > 2013 > Identity Theft

The Scariest Identity Theft Stat

Advertiser Disclosure Comments 0 Comments

Identity theft victims suffered more than $24.7 billion in direct and indirect losses in 2012 — that’s more than the combined $14 billion in losses consumers experienced from other types of theft (burglary, motor vehicle theft and other property theft) in the same period.

The Bureau of Justice Statistics highlighted these and other staggering statistics in its 2012 Victims of Identity Theft report, which was released this month. About 16.6 million U.S. residents ages 16 and older were victims of at least one incident of identity theft last year. That’s about 7% of the population in that age group, and they most often experienced misuse of existing bank and credit card accounts.

Financial Institutions Find the Most Fraud

That’s a lot of fraud, and people usually don’t spot it on their own. About 45% of identity theft involving existing accounts was discovered by financial institutions, who then notified the affected consumers. That percentage drops to 15% among victims whose personal information was used to open a new, fraudulent account, but 21% of those victims found out about the fraud when another type of company or agency reached out to them. Thirteen percent of that victim pool found out when they received notice of an unpaid bill.

Roughly 20% of consumers discovered their accounts were being misused by finding fraudulent charges on their statements, but the self-discovery rate is only 8% among other identity theft victims.

Who Loses the Most Money?

While flying under the radar, the thieves defrauded Americans of billions of dollars. Last year, 66% of identity theft victims reported a direct financial loss from their most recent incident. On average, victims whose personal information was misused suffered direct losses of $9,650 (the median was $1,900). New account fraud victims experienced an average of $7,135 in direct losses ($600 median), and credit card fraud victims averaged direct losses of $1,003 ($200 median).

The victim doesn’t usually bear the brunt of those losses. Fourteen percent of identity theft victims reported out-of-pocket financial losses of at least $1, and nearly half of those costs amounted to less than $100. Of that 14% who lost money, 18% reported expenses of between $100 and $249, and for 16% of victims, identity theft cost $1,000 or more.

The Real Cost of ID Theft

Identity theft is a headache no matter what, but consumers can keep it from becoming a migraine by protecting their personal information and closely monitoring their existing accounts and credit reports.

While most identity theft victims don’t personally lose money, thieves can leave a trail of poor financial behavior under a victim’s name, translating into negative accounts on credit reports and lower credit scores. Victims whose personal information was misused are more likely to experience financial problems such as dealing with debt collectors, repeatedly correcting credit reports because of identity theft than those whose existing account information is stolen, but victims of all categories may experience these issues.

It can be challenging enough to build good credit without someone else coming in and wrecking it, so taking measures to protect yourself from identity theft is a worthy investment of time, and in some cases, money. Good credit scores will help you qualify for favorable loan interest rates and gain wider access to financial products, and those scores are based on financial matters conducted under your name and included on your credit report.

That’s why checking your credit report regularly is an important habit — financial institutions may be good at catching ID thieves, but if you can spot something amiss before they do, all the better. Consumers are entitled to free annual copies of their credit reports from the three major credit bureaus: Equifax, Experian and TransUnion.

Credit scores can also help you spot suspicious activity. The Credit.com Credit Report Card is a free tool that allows consumers to receive monthly updates on their credit scores and the behaviors that determine them, such as timely payments. A sudden drop in your credit scores could indicate someone is misusing your identity.

Prioritize Security

Data breaches have become a regular occurrence these days, and while such security mishaps are beyond your control, you don’t want to make it easy for the fraudsters. Make sure to use secure WiFi when accessing sensitive information online, use available security measures like two-step account verification and strong passwords.

Some good news: 86% of victims spend a day or less resolving financial and credit problems stemming from the fraud, though 10% spent more than a month doing so. Again, people whose personal information was misused experienced the biggest problems.

It can be daunting to feel as if you’re fighting against a phantom enemy — 32% of identity theft victims knew how their information was compromised, but only 3% of credit card fraud victims knew anything about the offender. But the potential for financial problems after identity theft provide more than enough motivation for making security a priority.

Image: iStock

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

Certain credit cards and other financial products mentioned in this and other articles on Credit.com News & Advice may also be offered through Credit.com product pages, and Credit.com will be compensated if our users apply for and ultimately sign up for any of these cards or products. However, this relationship does not result in any preferential editorial treatment.

Hello, Reader!

Thanks for checking out Credit.com. We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The Credit.com editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline, TheStreet.com, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The Credit.com editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on Credit.com, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of Credit.com in general and they result in more traffic to us as well.

Our Business Model

Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.

Our Owners

Credit.com is owned by Progrexion Holdings Inc. which is the owner and administrator of a number of business related to credit and credit repair, including CreditRepair.com, and eFolks. In addition, Progrexion also provides services to Lexington Law Firm as a third party provider. Despite being owned by Progrexion, it is not the role of the Credit.com editorial team to advocate the use of the company’s other services. In articles, reporters may mention credit repair as an option, for example, but we’ll also be sure to note the various alternatives to that service. Furthermore, you may see ads for credit repair services on Credit.com, but the editorial team isn’t responsible for the creation or implementation of those ads, anymore than reporters for the New York Times or Washington Post are responsible for the ads on their sites.

Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Credit.com Editorial Team