(Reuters)
- Nearly 12 million Americans were victims of identity theft in 2011,
an increase of 13 percent over 2010, according to a report released on
Wednesday by the research firm Javelin Strategy & Research.
The rise in the use of smartphones and social media by incautious consumers fueled the increase in identity fraud, and 2011 was a year of several big data breaches too, Javelin said.
With the rise in credit card
monitoring and more sophisticated policing by credit card companies,
identity thieves are increasingly targeting users of smartphones and
social media, where consumers have a tendency to be less cautious,
experts say.
"The message is not
that people should let their guard down," Javelin founder and President
Jim Van Dyke said. "The challenge that we have is that criminals often
change faster than everyday consumers or businesses."
The number of people
whose information was accessed in a data breach increased by 67 percent
in 2011, largely due to some very high-profile thefts, such as the
attacks on Sony Corp's PlayStation network in April.
Someone whose personal information is taken in a data breach is 9.5 times more likely to become a victim of identity fraud, Javelin found.
One heartening
finding was that dollar losses by consumers remained stable last year
despite the increase in the number of victims. Credit card issuers'
policies on fraudulent transactions -- a $50 limit on losses, which is
often waived -- and quicker detection has limited out-of-pocket costs to
consumers, said Van Dyke.
For the past nine years, Javelin
has been analyzing data and survey information about identity fraud,
usually defined as the opening of new accounts in the name of a victim.
STILL VULNERABLE
For every
advancement made on the protection side, consumers remain vulnerable due
to the resourcefulness of crooks.
"They're doing more
and more crime in order to get the same return," said Mike Urban, who
analyzes fraud patterns for Fiserv Inc, a consulting company that helps
financial institutions defend against crime and other risks. "It's
pushing the criminals to work even harder."
In 2011, some of the
biggest data thefts ever recorded took place. In the attacks on the
PlayStation network, hackers obtained the personal information of tens
of millions of users and the credit card numbers of some.
Also last year,
hackers stole millions of names and email addresses from Epsilon, the
marketing division of Alliance Data Systems Corp. That firm sends email
marketing information on behalf of major banks, retailers and hotels,
among others. Citigroup Inc also reported a large data theft.
About 7 percent of
all smartphone users fell victim to identity fraud in 2011, according to
Javelin. Smartphone users were about a third more likely to become
victims than non-users. Javelin found 62 percent of smartphone users do
not use password protection for their home screens; this allows anyone
who finds or takes their phones to have access to the contents.
Fiserv's Urban said
downloaded apps are often a problem, too. The lure of a free game,
particularly one not vetted through a company-operated site such as
Apple Inc's iTunes, can result in users having programs that collect and
distribute their personal information.
Javelin also found
that many social media users reveal too much personal information,
including their birth dates, where they went to high school, their phone
number and other information used to verify identity.
"You don't leave
your money lying on a table," said Urban. "You don't want to leave your
important information out there."
TIPS
Here are some tips from Javelin to avoid becoming an identity fraud victim and mitigating losses:
- Password protect
your home and mobile devices. Avoid exposing personal information that
can be used by someone else for identity verification.
- Be careful about the apps you download. Only download through a service that monitors the apps, such as iTunes.
- Share information carefully when you are on a public wifi network.
- Monitor your
credit cards by checking their use online or reading the statements
carefully. Quickly report to your credit card issuer if you see any
suspicious transactions.
- Take data breach
notifications seriously. If your data has been accessed, consider
subscribing to a credit-monitoring service, which is often is offered
for free for a year by the company that had been breached.
(The author is a
Reuters contributor. The opinions expressed are his own. Editing by
Linda Stern, Chelsea Emery and John Wallace)
