The Checkout

Identity Theft Study Revisited

Some consumer advocates who specialize in privacy issues have written to complain about a blog item last week on a new identity theft study done by the Better Business Bureau and Javelin Strategy and Research, a consulting firm for the financial services industry.

Their complaints centered on the statement: "Almost half of all identity theft is perpetrated by someone the victim knows: friends, neighbors, family members, in-home employees, etc."

Beth Givens, Director of the Privacy Rights Clearinghouse, a nonprofit consumer advocacy group, said that statement "is only half correct." According to Givens: "The survey found that only 36% of victims know who the imposter is. Of that 36%, just over half are closely associated with the victim such as a family member, friend, neighbor or in-home employee. So, for the statement to be correct, it should be written something like this: 'Of those victims who know the identity of the perpetrator, which is 36% of victims surveyed, one half of those are closely associated with the victim such as family members, friends, or in-home employees. Thus, for 18% of the victims, or about one in six, the perpetrator is someone close to them.'"

Givens continues: "By stating that half of all ID theft crimes are caused by a family member or someone closely connected to the victim, the reader is led to think that the key prevention strategy should be that individuals safeguard their personal information in the home. While that is true and should be done no matter what, this erroneous statistic obscures the bigger prevention issue. Prevention is most effectively addressed by the credit issuers in the procedures they take when they evaluate the credit applications they receive (by noting anomalous addresses, phone numbers, dates of birth for example). ID theft would not be the huge societal problem it is today if credit issuers would do a better job weeding out the obviously fraudulent applications they receive from imposters."

James Van Dyke, founder of Javelin, stands by his company's study. "Some have speculated that crimes from victims who lack knowledge of the perpetrator's identity or method may have a significantly different pattern from the 'known' crimes. Javelin collected data from a variety of sources and analytic methods, which kept pointing to the original conclusion: Identity fraud crimes are much more traditional than is popularly believed, which means that we must protect ourselves through all transaction methods, and not just the Internet."


By  |  March 7, 2006; 9:00 AM ET Consumer News
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Comments

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Posted by: Anonymous | March 7, 2006 10:56 AM

The identity theft epidemic that has garnered national attention is largely due to organized rings that obtain the information, usually from financial institutions or medical offices, and exploit the information in such a way as to maximize recovery with limited risk of getting caught. They are quite good at this. The old line friend and neighbor thing has been around for years and pales in comparison to what the pros do and it is not what has garnered headlines.

It is in the best interests of financial institutions and credit agencies to put out propaganda that id theft is caused by friends, neighbors, or failing to shred documents to distract people from the real problem: poor privacy practices by financial institutions, credit agencies and medical offices combined with instant credit and poor bank branch security measures. I think this can be seen simply by noting that Javelin works for the financial services industry.

Posted by: Dunce | March 7, 2006 11:34 AM

James Van Dyke's quote suggests that it is identity theft victims who must bear the primary responsibility for having been victimized, because presumably they didn't take adequate measures for preventing their personal information from falling into the wrong hands. Yet personal information about us, such as our SSNs, birthdates, etc., is not secret but is widely available to those who know where to look.

Rather than blaming the victim, Van Dyke ought to place the blame where it belongs: on credit granting entities who are willing to accept a few items of non-secret information as "proof" of one's identity. It is the credit grantors who must take better care to make sure that those applying for new accounts are really who they claim to be.

Posted by: b | March 7, 2006 3:36 PM

One other comment: Their is one other factually incorrect post on your site, left by an anonymous poster on March 7. Let me be clear: US consumers need and want more control over their own finances, and its is not correct to blame victims. This increased control cannot fully take place without a change in how individuals' finances are handled. ID fraud is very much a shared problem, and the costs to both vicitms and industry are on the rise, with victims requiring 40 hours' resolution time and companies now bearning well over 90% of the average fraud cost of $6,383, according to our study. As so many of our reports state, this problem will only be solved with a change in education and practices, and the responsibility for that falls on all of us: individuals, law enforcement and regulators, credit grantors, and employees of banks, merchants and processors. Our reports call for very specific steps on the part of everyone, but this $56.6B annual problem won't be solved by viewing ID fraud as a simple problem that just one entity can solve.

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Posted by: Allison Trump | May 17, 2006 7:35 PM

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