Credit Card Fraud Surging in I.D. Theft Cases, Study Says

Credit card fraud surged in 2009 as the No. 1 form of rising identity theft, and it now comprises 75 percent of I.D. crime cases, according to a survey of 5,000 adults by Javelin Strategy & Research, the California-based research firm.

That credit card portion of I.D. fraud is up from 63 percent in 2008, Javelin‘s study found.

The overall number of identity theft victims in the United States rose 12 percent to 11.1 million last year, the firm’s findings show.

Total losses from identity fraud climbed 12 percent to $54 billion, up from $48 billion in 2008. The mean theft amount – per victim – slightly decreased to $4,841, but out-of-pocket consumer losses were $373, down from $498 in 2008, Javelin said.

“The average consumer cost is actually dropping because businesses are shouldering more of that actual fraud amount in order to protect individuals,” said James Van Dyke, Javelin president and founder. This is Javelin’s seventh annual identity fraud report.

Survey respondents reported more credit card fraud, followed by debit card fraud — 33 percent, down from 35 percent. The survey also showed an increase in stolen checking account numbers and health insurance documents. 

Identity fraud involves stealing a person’s personal information, such as Social Security numbers, information from bank accounts or credit cards, for financial gain. Thieves will often use that information to conduct bank account or credit card transactions through the creation of bogus credit or debit cards.

Rapidly evolving technology that provides greater remote Internet access on cell phones, tablets, Netbooks and other devices is increasing the time people spend online and the amount of information available to identity thieves.

Van Dyke said the new “Red Flags Rule” is starting to have an impact. According to the Federal Trade Commission, the rule requires businesses and organizations to create a written identity theft prevention program to detect the warning signs, or “red flags,” of identity theft in day-to-day operations.

“But the bottom line is that there’s just more criminal activity,” Van Dyke said.

Helpful link: the Federal Trade Commission’s I.D. theft website.