SCARBOROUGH, Maine, and SAN FRANCISCO (4/2/08)--Fraud-fighting tools that protect consumers' data and identities online have resulted in a decline of overall fraud losses. But that decline has brought a return of offline methods of fraud, usually by telephone and mail, according to recent research. Some credit unions might warn their members to be especially alert to the offline vishing methods, where callers pose as representatives of a financial institution needing personal and account information. Because consumers are more used to protecting their data online, they let their guard down over the phone or get trapped into a mail fraud. Hannaford Bros.--a grocery chain that revealed a data breach last month--warned on its website that criminals like to take advantage of such incidents to contact consumers with "follow up" calls and e-mails seeking more information or preying on their vulnerabilities about security. Overall fraud losses declined 12% in 2007 to $45 billion from the previous year (U.S. Banker
March). But a recent study from Javelin, based in Pleasanton, Calif., indicates that:
* ID theft remains the third-most prevalent fraud complaint at 32%: * Vishing offline schemes grew to 40% of all fraud incidents in 2007, compared with 3% in 2006; * The number of victims of fraud losses tallied 8.1 million in 2007, a slight decline from 8.4 million in 2006, but a decrease from the 10.4 million affected in 2003; and * The ID-fraud incident rate decreased to 3.58% of the U.S. population in 2007, while the per-incident cost to consumers went up 25% to $691 per episode.
There is more ID theft in states with dense populations, more commerce and higher incomes, Javelin found. Family- or friend-related ID theft is another trend on the rise. However, many victims are reluctant to prosecute their friends or family members. New-account fraud activity also is changing. New wireless phone accounts increased in fraud to 32% from a previous 19%. The report said this type of fraud now exceeds fraud related to new credit cards, loans, and checking or savings accounts. The strongest means of consumer self-directed protection remains multifactor authentication and credit file monitoring, said Javelin.