@Risk

It’s a typical good news/bad news scenario.

Results from the 2010 Identity Fraud Survey, released yesterday by Javelin Strategy & Research, show that fraud increased for the second straight year and is at the highest rate since Javelin began this report seven years ago.

That’s the bad news.

But here’s the good: the report also found that protection of data by consumers and businesses and enlisting assistance in resolution are helping resolve fraud more quickly and are also reducing or eliminating costs for the consumer.

This survey is the nation’s longest-running study of identity fraud, and in November 2009, Javelin conducted telephone interviews with 5,000 U.S. adults. Survey questions were designed  to identify and track the methods fraudsters used, the impact of fraud on Americans and how these findings can help consumers most effectively avoid becoming victims of fraud.

Here are a few details from the study that I thought were particularly interesting:

• In 2009, the number of identity fraud victims in the United States increased 12 percent to 11.1 million adults (4.8 percent of the population). The total annual fraud amount increased by 12.5 percent to $54 billion.

• However, average fraud resolution time dropped 30 percent to 21 hours, and nearly half of new victims file police reports, resulting in double the reported arrests, triple the prosecutions, and double the percentage of convictions in 2009.

• 39 percent of all identity fraud involves fraudulent new credit card accounts –that’s up six percent from 2008. New online accounts opened fraudulently more than doubled over the previous year, and the number of new e-mail payment accounts increased 12 percent.  For the first time, this year’s survey asked about new mobile phone account fraud and found that 29 percent of new accounts fraud victims resulted from newly opened mobile phone accounts.

• Identification most likely to be compromised in a data breach continues to be Full Name (63 percent) and Physical Address (37 percent). Health Insurance Information is increasingly targeted. But, the percentage of Social Security numbers compromised decreased to 32 percent from 38 percent in 2008.

• 75 percent of existing card fraud incidents came from credit cards, an increase of 12 percent over 2008. In contrast, existing debit card fraud incidents decreased two percent and represented 33 percent of total existing card fraud in 2009.

• Half of all victims filed a police report, resulting in more arrests and convictions. Victims became more vigilant in reporting identity fraud, and reported this resulted in an arrest rate twice last year’s rate, and a prosecution rate that tripled compared to 2008.

• Small business owners suffered identity fraud at one-and-a-half times the rate of other adults. Javelin attributes this to the fact that small office / home office business owners use personal accounts when making business transactions and make more transactions than typical adults.

Based on these survey results, it appears that technology is helping consumers—and businesses –better monitor, detect and resolve identity fraud, but obviously, vigilance regarding personal information is critical.

For more information about the study and to review recommendations to prevent criminal access to your personal information, see this informative press release.