Identity fraud rise tied to smart phones
23 February 2012, 14:06
New York - Nearly 12 million Americans were victims of identity
theft in 2011, an increase of 13% over 2010, according to a new report.
The rise in the use of smartphones and social media by incautious
consumers fuelled the increase in identity fraud, and 2011 was a year of
several big data breaches too, said research firm Javelin Strategy
& Research, which released the report.
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% in
2011, largely due to some very high-profile thefts, such as the attacks
on Sony Corp's PlayStation network in April.
personal information is taken in a data breach is 9.5 times more likely
to become a victim of identity fraud, Javelin found.
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 analysing data and survey information about identity
fraud, usually defined as the opening of new accounts in the name of a
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 analyses fraud patterns for Fiserv, a consulting
company that helps financial institutions defend against crime and other
risks. "It's pushing the criminals to work even harder."
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
Also last year, hackers stole millions of names and
e-mail addresses from Epsilon, the marketing division of Alliance Data
Systems. That firm sends e-mail marketing information on behalf of major
banks, retailers and hotels, among others. Citigroup also reported a
large data theft.
About 7% 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.
found 62% 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's iTunes, can
result in users having programmes that collect and distribute their
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."
To avoid becoming a victim of identity fraud Javelin suggests consumers
password protect their home and mobile devices and avoid exposing
personal information that can be used by someone else for identity
It also suggested downloading apps only through a
service that monitors the apps, such as iTunes, and to share information
carefully on a public wifi network.
Credit cards should also be
monitored for any suspicious transactions and data notifications should
be taken seriously. If there has been access, consider subscribing to a
credit-monitoring service, which is often offered for free for a year
by the company that had been breached.
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