Identity Theft Facts

Identity theft is now the number one reason that many consumers find themselves having to contact the Federal Trade Commission. Statistics from the Federal Trade Commission also show that identity theft is a growing threat to people’s financial security and personal privacy.

The last two really big studies on identity theft were done in 2003 and were conducted by two different companies Harris Interactive and Gartner Interactive. As of July 2003 seven million people were estimated to be the victims of identity theft . That is 799 people per hour. It also means that thirteen people a minute are having their identities stolen. Most of the people interviewed for these studies (over 90%) said that they do not know how to prevent such a crime from happening to them.

Another study, conducted by the ITRC, called Identity Theft: The Aftermath reveals some more disturbing facts about identity theft.

It takes most people about 600 hours of their time to recover from this crime. The average length of time it took to fix up a person’s credit and financial information was three years. This figure averages out to represent about $16000 in lost potential or realized income.

This figure takes a big jump from the 175 hours it used to take to remedy this situation in 2003. It seems that it is taking far longer than ever before to clear their records and recover from the situation.

The emotional and physical impact of this may take over a decade. The consequences can include increased rates and fees for insurance or credit cards, higher interest rates and fighting collection agencies and issuers who may refuse to clear your credit report despite the fact that you have evidence that your identity was stolen.

The same study found that the emotional and psychological impact of identity theft is comparable to such violent crimes as assault, rape and battery. Many of the victims feel violated, ashamed and embarrassed as the criminal assaults the integrity of their reputation first of all and then second of all by lenders and merchants who don’t want to foot the bill for the chargeback. Often family disputes and mood disorders are the result of the stress caused by identity theft.

There is also financial stress associated with the correcting of a situation to do with identity theft. Today’s victims spend $1,400 on average to repair their credit reports and reputations. This figure is up 85% from 2000.

Another distressing thing that this study showed was that most people found out about their fraud accidentally. They were either denied employment or credit or notified by the police department. Many also failed to receive a credit card bill (as the result of a fraudster changing their address so the fraud would not be detected right away.)

Only 15% of people found out about the fraudulent use of their card from businesses or a merchant. Most of the time this was done through a positive action taken by a retailer or business that asked for a verification of some kind such as a change of address.

The merchants are the real losers when fraud is committed. Based on the ITRC study, today the business community loses between $40,000 – $92,000 in charge backs.

According to the Executive Office for U.S. Attorneys, when people or the credit card companies decided to prosecute the crimes the average cost of putting a case through the courts was $11,443. Estimates from the Secret Service and the FBI are a little higher with the Secret Service estimating the average cost per crime investigation at $15,000 and the FBI investigating it at $20,000.

Yet another study by the ITRC also came up with a personality profile for id theft criminals. Most have been charged already and are repeat offenders. Other convictions include robbery, immigration problems, substance abuse, narcotic trafficking and violent crime. Only 5% total of identity thieves are ever caught which might explain why the crime is growing at such a rapid rate.

According to the Federal Trade Commission the top ten places to experience identity theft are (in order): Washington D.C., California, Arizona, Nevada, Texas, Florida, New York, Washington, Maryland and Oregon.