According to the recently released Javelin Strategy & Research Identity Fraud Study, Identity Theft Affected 40 Million U.S. Adults in 2022 Totaling $43 Billion in Losses.
Javelin Strategy & Research (Javelin), which has supported 20 years of identity theft and fraud research, “provides a comprehensive analysis of fraud trends in the context of a changing technological and payments landscape to inform consumers, financial institutions, and businesses about the most effective means of controlling identity fraud.” Javelin also states that “criminals continually adjust their tactics, so much work remains to dramatically reduce the impact of identity fraud.”
The Javelin Study highlights include the following:
Total identity fraud losses were $43 billion. That’s down from $52 billion the year before, a decline of 17%.
Identity fraud scams victimized fewer people. Javelin credits this to consumer outreach by financial services and consumer advocacy groups, and stronger fraud prevention tactics at banks and credit unions. The decline in number of victims was 2 million, even as significant challenges persist in the overall battle against identity fraud and scams.
Identity fraud has a disproportionately severe impact on non-white households. Exposure to data breaches affects 27% of Hispanic households and 26% of Black households—a considerable difference from White households—and the gap widens when compared with Asian households. The report describes the heavy toll identity fraud exacts on its victims, explores several contributing factors, and provides recommendations based on these findings.
Significant reduction in new-account fraud. This is an indication that financial service providers are focusing more intently on identity and authentication practices through the use of fraud detection technology.
While the Javelin Study comes with encouraging news and a word of caution: “Overall dollar losses are down $9 billion from the previous study year, but two decades of studying identity fraud show that the ups and downs require financial services providers and consumers’ ongoing vigilance to protect personally identifiable information.
For the first time this year, the Javelin Study researched victim impact statements, placing a “human face to crimes that often shatter confidence, shred credit, and harm long-term financial well-being.”
Separate from Javelin, the Identity Theft Resource Center (ITRC), released its 2022 ITRC Consumer Impact Report last September. The ITRC Consumer Impact Report goes beyond the known financial implications of identity crimes and explores the lost opportunities, as well as the emotional, physical, and psychological impacts experienced by victims resulting from identity theft and fraud crimes.
Key takeaways from the 2022 Consumer Impact Report include:
Overall, identity crime victims are losing less money. Most ITRC victims and general victims report losing less than $500.
However, one group of ITRC victims grew from nine (9) percent in 2020 to 30 percent in 2021 – those victims lost $10,000 or more.
The number of ITRC victims who reported experiencing negative emotions increased in 2021 to 87 percent from 79 percent in the previous year, while the number of ITRC victims who reported physical impacts jumped from 44 percent to 68 percent in one year.
Two-thirds of general victims reported emotional and physical effects of being an identity crime victim.
More victims reported freezing their credit and using an Identity Protection PIN from the Internal Revenue Service (IRS) when filing taxes.
Since identity theft and fraud is constantly evolving, consumers need to stay up to date on identity theft and fraud trends through organization's like the Identity Theft Resource Center. In addition, business can use Javelin Strategy to help make informed decisions in the digital financial world.
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