ID Theft: Crimes Being Detected Earlier by InstitutionsBut Prevalence of Crimes is Costing Consumers Their Credit Financial institutions must execute best practices internally and do a better job educating their customers on identity theft.
This is the advice stemming from the Identity Theft Resource Center (ITRC), which recently released its sixth annual report, Identity Theft: The Aftermath 2008, providing essential information for financial institutions to protect their customers from ID theft.
Banking security leaders and government security leaders need to implement best practices, according to Linda Foley, Founder and Chairman of the ITRC. "Authenticate the people you're interacting with," she says. "Look at your company and try to evaluate all areas a thief could possibly take advantage of. Plug those holes and develop a written policy for the staff. We have to find better ways to authenticate, which will then allow someone to say, 'I can show you that is not me.'"
Foley sees the atmosphere changing in regards to ID theft. "People are [now] going to embrace processes that will help to protect their information and to avoid allowing an identity thief from using that information," she says.
The report, supported by the U.S. Department of Justice's Office for Victims of Crime, analyzed different areas of statistics dealing with the victims of ID theft crimes. The topics included: prevalence of types of ID theft crimes, medical ID theft, moment of discovery, uses of victim information, costs to victim, cost to business, victim hours repairing damage, inability to clear negative records, secondary effects and emotional impact.
The biggest differences this year come from proactive measures taken by businesses and their customers. With advancing technology, crimes are being recognized earlier and steps are being taken immediately to correct the damage.
Another important change is the rise in denied credit and credit card cancellations caused from ID theft. This is due to the increased difficulty surrounding each case. No victim is the same, and every situation calls for different measures. This makes it harder for businesses and consumers to clean up the mess, making it tough on the victims, causing them to lose their credit until the problem is fixed.
"ITRC firmly believes that only a collaborative effort will provide us with the tools needed to thwart identity thieves," the report says. "Unless we adopt a policy of 'it is us' against the criminals, the criminals will continue to win."
The report was made up of 43 questions covering 15 categories, and the findings released were based on highlights from The Aftermath 2008 study. Survey respondents, 100 in total, included victims the ITRC worked with throughout 2008.
"There is no one type of crime or identity theft victim," according to Foley. "Each case is unique and has its own complexities. That is why we work with them rather than just having them use an online program that cannot customize the steps a victim must take."
For Foley, there will always be identity theft. "You cannot prevent identity theft from occurring or reoccurring," she says. "Unfortunately, it always ends up on the victim's shoulders to clean up the mess because no one else is going to do it for them. Companies aren't going to do it on their own."
Among the findings from the annual report:
- Prevalence of Types of Identity Theft Crimes - In 2008, financial only ID theft crimes were reported by 73% of the respondents, slightly less than in 2007. Criminal-only ID theft made up 5% of all cases, and governmental issues, including employment and tax fraud, made up 2%. The rest were combination cases, involving financial and criminal (6%), financial and governmental (9%), and a combination of all three types (5%).
- Moment of Discovery - Only 34% of victims who reported ID theft discovered it through adverse situations, decreasing from 2007's 82%. This is a drastic change in the way victims discovered the crime. The good news is: Businesses are now starting to warn consumers earlier on about possible situations regarding their information; and consumers themselves are becoming proactive by checking their billing statements every month, looking for information that is not being delivered properly.
- Inability to Clear Negative Records - In 2008, victims reported that factors complicating their ability to clear negative records included the inability to get a police report, credit accounts being reposted on credit reports, fraud alerts being ignored and the inability to prove innocence even with a police report. Since 2007, ID theft has expanded. For example, someone stealing a wallet brings up many different scenarios because the contents of the wallet will always be different. There are different steps for every possible type of ID theft, and that leads to complications. "We're trying to educate people that identity theft is not one size fits all," Foley explained. "Depending upon the type of identity theft situation, the steps that someone needs to take are different. That's why we have over 270 articles and documents on our Web site."
- Secondary Effects - Because of ID theft (and the current recession), credit card cancellations and denied credit are up to 70%, an all-time high.
To get a better look at the report, Identity Theft: The Aftermath 2008 can be found at: http://www.idtheftcenter.org/artman2/publish/m_press/Identity_Theft_The_Aftermath_2008.shtml.