Hitmetrix - User behavior analytics & recording

FTC: ID Theft Cost Business $48B in 2002

Identity theft, the fastest-growing problem in consumer protection, has had 27.3 million victims in the past five years, including 9.9 million in the past year alone, the Federal Trade Commission said yesterday.

The FTC released data from an identity theft survey of 4,000 U.S. adults conducted in March and April, the first time the agency has published such data. The survey found that identity theft cost U.S. businesses and financial institutions $48 billion last year and cost consumers $5 billion out of their own pockets to resolve problems caused by the thefts.

Average loss per victim was $4,800 for businesses and $500 for consumers. However, in the past 12 months, 3.23 million consumers found new accounts were opened in their name or that their names were used in renting apartments and homes and to obtain medical care and employment. In those cases, the average cost per victim was $10,200 for businesses and $1,180 for consumers.

In the past 12 months, 6.5 million consumers reported identity thefts involving existing accounts. This type of theft is on the rise, but that may be good news because these problems tend to be simpler and quicker for consumers to solve, said Howard Beales, director of the FTC's bureau of consumer protection.

In cases where identity theft involved charges against existing consumer accounts, the average loss per victim for businesses was $2,100. Federal law limits consumer liability in these and other identity theft cases.

The survey reported some other good news in that one-third of the victims discovered the theft within a week of its occurrence, and 52 percent discovered the problem on their own by monitoring their banking and credit accounts. Another 26 percent learned of the theft from a company with which they do business, while 8 percent discovered problems after their applications for credit were turned down.

“Outreach and media reports are helping people to wise up,” Beales said.

However, half of the victims said they didn't know how the theft had occurred. One-quarter reported information loss, such as lost credit cards, checkbooks and Social Security cards, while 4 percent reported the cause of identity theft as stolen mail.

Identity theft complaints to the FTC have doubled yearly since the agency started tracking such data in 1998. All told, the FTC database contains 400,000 reports of identity theft, which the agency uses to help consumers and law enforcement.

Related Posts