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Identity theft victims skyrocket, surveys say.

A May 2003 study funded by Privacy & American Business (P&AB) and conducted by Harris Interactive reveals that the 7 million victims of identity theft in 2002 represent an 81 percent increase over the number of victims in 2001. Furthermore, incidents reported in 2003 suggest a major spike in the 2002 numbers. A more recent five-year analysis of identity theft by the U.S. Federal Trade Commission (FTC) came to the same conclusions. The FTC received almost 162,000 identity theft comphinis in 2002--double the number received in 2001--and estimates that as many as 700,000 Americans are victimized each year, costing each about $1,000 to correct the damage to their credit reports.

According to the P&AB survey, 33.4 million Americans say they have been victims of identity theft or fraud since 1990, with more than 13 million since January 2001 and rising. The survey also shows that victims' resulting outof-pocket expenses have totaled $1.5 billion since January 2001.

Calling identity theft the "All-American crime of the Information Age," study designer Alan Westin, professor emeritus of Public Law and Government at Columbia University, noted that the crime is spread broadly throughout the American community, striking people of all ages, income levels, and races.

The survey defined identity theft as a situation where someone assumes the identity of another and makes telephone calls or obtains merchandise, credit, or other valuable things in their name. Of those who knew how the identity theft or fraud was committed:

* 34 percent said someone obtained their credit card information, forged a credit card in their name, and used it to make purchases.

* 12 percent said someone stole or improperly obtained a paper or computer record with their personal information on it and used that to forge their identity.

* 11 percent said someone stole their wallet or purse and used their identity.

* 10 percent said someone opened retail charge accounts in their name and made purchases.

* 7 percent said someone opened a bank account in their name or forged checks and obtained money from their account.

* 7 percent said someone got to their mail or mailbox and used information there to steal their identity.

* 5 percent said they lost their wallet or purse and someone used their identity.

* 4 percent said someone used informarion gleaned from public records to steal their identity.

* 3 percent said someone created false IDs to get government benefits or payments.

The FTC's report notes that credit card fraud was the most common form of identity theft in 2002, accounting for 42 percent of the complaints it received that year. Second at 22 percent is phone or utility fraud, followed by hank fraud at 17 percent.

According to P&AB's report, while 62 percent of victims did not incur any out-of-pocket expenses, 38 percent did, representing almost 14 million Americans. Since January 2001, those individuals have paid approximately $3.8 billion, an average of $1.5 billion annually. The average cost per victim for this time period was $740.

A June 2002 P&AB survey revealed that 91 percent of Americans expect identity theft incidents to increase rather than decrease in the future. This survey also found that 49 percent, or 98 million adults, do not know how to protect themselves against identity theft.

Westin noted that no country is immune--identity theft and fraud levels are also high in Canada, Australia, and Britain, and it is developing in Japan, with similar costs to victims and businesses.
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Title Annotation:Up front: news, trends & analysis
Publication:Information Management Journal
Date:Nov 1, 2003
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