Identity fraud, also known as identity
theft, refers to any time a person uses personal information that is not his,
usually to establish a bank account, apply for a loan, or purchase items using
fraudulent credit card information. Within this definition, experts also
distinguish between “new account fraud,” in which the perpetrator creates a new
credit card or bank account that the victim is responsible for, and “existing
account fraud,” in which the perpetrator uses an already existing account.
Both types of identity fraud can result in monetary losses, lengthy legal
proceedings to repair your credit, and difficulties establishing utilities
accounts, applying for loans, or making large purchases. With so many
consequences, it is no wonder that nearly 80% of U.S.
residents surveyed fear identity fraud.
The Internet Security Issue: Identity Theft More Prevalent Offline
Unfortunately, most people also make the incorrect assumption that there is
a link between an increasing reliance on the Internet to do business and
identity theft. According to a 2005 Gartner survey, 3 out of 4 Web shoppers are
more cautious about identity theft online than off. However, as recent reports
show, this generally held attitude could not be
further from the truth.
According to a survey by Javelin Strategy and Research, only 12% of identity
fraud cases occurred last year because the victim was online, whereas 63%
happened as the victim used more traditional, offline channels. The most
commonly implicated offline channels include stolen wallets and paper bank
statements and bills stolen from the victim’s mailbox. Victims also suffered
fewer consequences from incidents of online identity fraud.
On average, victims of online identity theft suffered $550 in losses per
incident, whereas those who had their information leaked on paper suffered an
average of $4,543 in losses, and discovered the fraud more slowly.
Protecting Yourself From Offline and Online
Identity Theft
Because offline sources are most commonly implicated in identity fraud,
experts recommend cancelling all paper bills and bank statements, and
monitoring the activity of financial affairs entirely online. Frequently
checking statements using online banking that is updated in real-time will help
catch any account discrepancies sooner. If you must receive a paper credit card
or bank account statement, experts suggest requesting it as infrequently as
possible, and shredding the documents before discarding them. Having a high
speed broadband Internet connection to shop online and check bank statements
will help, rather than hinder, your attempts to protect yourself and your
family from identity theft.
