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Identity fraud rose in 2011 says new report
CHANTILLY, Va. (2/23/12)--The number of identity fraud incidents increased 13% in 2011 to a total 11.6 million adult victims, according to a new survey.

The 2012 Javelin Strategy & Research Identity Fraud Report also found that some social media behaviors and the increasing number of data breach incidents contributed to the rise of identity theft  in the U.S. The study was co-sponsored for the fourth year by Intersections Inc. a consumer and corporate identity theft risk management service.

The study underlines the effects that consumer awareness programs by financial institutions such as credit unions and others had in mitigating some of the impact of the identity fraud.

Other findings:

  • Fraud incidents rose. Victims of a data breach were 9.5 times more likely to be a victim of identity fraud.  Data breach victims  increased 67% in 2011, and the increase correlates with the increase in identity fraud victims.
  • Costs of losses stayed steady. Although the number of victims increased, the total dollar amount tied to their losses remained steady in 2011. The report attributed this to more stringent authentication practices by financial institutions and increased consumer-awareness efforts by financial institutions and government.
  • Detection advanced. Electronic monitoring of accounts through the Internet, ATM or other electronic means is leading the way of detecting fraud over reviewing paper records. About 54% of victims in 2011 were notified they had been a victim of an identity theft by their financial institution, law enforcement and other authorities.
  • Social media contributed to the rise.  Consumers who actively engage with social media and use a smartphone had a disproportionate rate of identity fraud when compared with consumers who do not use these media.
The findings in this year's study indicate that fraudsters are taking advantage of consumers' increased use of social networks and hacking into large businesses where many identities are housed in a single place. Consumers must remain consistent and committed to protecting their identity, said Intersections.  Credit unions can help by advising their members to:

  • Protect their information.  Exposing common information such as birthdates and addresses puts consumers at a greater risk because financial institutions commonly use these as security questions and validation of identity to access accounts. Even seemingly harmless information could be of value to experienced ID thieves.
  • Be social, but smart.  Knowing that social networks are a hotbed for identity fraud, members should take extra care when deciding who to "connect" with and what applications to accept. Users who approve "friend" requests from strangers or who use global positioning systems (GPS)/location-based applications are far more susceptible to fraud.
  • Take caution with mobile computing. Online and mobile banking are convenient, so they are here to stay. Consumers must take the extra step of ensuring their network connection is secure and their devices have updated security.
  • Be active in detection.  Consumers must take responsibility of protecting their identities into their own hands and enroll in comprehensive identity protection services.
  • Act quickly.  The sooner a victim learns of the fraud, the sooner they can recover from. It. Consumers should remain alert, act quickly if they notice suspicious activity, and report the activity to their credit union or other financial institution, and to law enforcement.
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