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  • Writer's pictureRoy Urrico

ID Theft Taking its Toll on Personal Finances and Emotions

By Roy Urrico

Identity theft is taking its toll on individuals from financial and personal standpoints, according to reports from U.S. News & World Report's 360 Reviews and the Identity Theft Resource Center (ITRC).

The Federal Trade Commission (FTC) received fraud reports from 2.4 million consumers in 2022, with the most commonly reported type being imposter scams, followed by online shopping scams. There were over 1.1 million reports of identity theft received by the FTC in addition to reports and complaints of other related consumer issues, such as problems with credit bureaus and financial institutions and lenders. The largest number of identity theft cases reported by the FTC involved credit card fraud, with more than 440,000 incidents in 2022.

However, there are issues beyond these statistics.

Identity Theft Resource Center 2023 Consumer Impact Report

The Identity Theft Resource Center, a national nonprofit organization established to support identity crime victims, recently published its 2023 Consumer Impact Report, supported by Experian. The report goes beyond the known financial implications of identity crimes and explores the lost opportunities as well as the emotional, physical and relationship impacts experienced by victims resulting from the crimes. The findings in the report highlight a rise in sophisticated social engineering scams and an increase in dollar losses from various identity scams.

For the report, the ITRC surveyed victims who contacted the ITRC and general consumers, including consumers who were victims of identity crimes but did not contact the ITRC. According to the responses, an increasing number of identity crime victims who spoke with the ITRC reported thoughts of suicide (16% in 2023 compared to 10% percent in 2022). Ten percent in 2022 was the all-time high for the ITRC prior to the large spike in 2023.

Eva Velasquez, president and CEO of the ITRC.

“Too often, we focus on the number attached to a statistic and focus too little on what it means,” said Eva Velasquez, president and CEO of the Identity Theft Resource Center. “The fact that 16% of identity crime victims thought it is easier to end their life than try to recover from an identity crime says as much about the lack of concern and support for identity crime victims as it does the victims themselves. We need to fundamentally change the way we support identity crime victims to ensure no one feels ignored or dismissed the way they do today.”

Velasquez added, “Everyone is vulnerable under the right set of circumstances, yet the discussion around identity crime victimization is either dismissive, judgmental or both. The language used when talking with victims and when talking about victims, particularly by the media and many cyber experts, can create more shame and embarrassment.” Velasquez suggested comments like “what’s the big deal, it’s not as bad a violent crime” and statements about victims being “duped” and “falling for…” creates an environment “where victims feel at fault and invalidated. In all of these instances, the feelings of shame and guilt can be overwhelming for the victims of these crimes. The loss of trust and security can also be life-changing.”

Other key takeaways:

· Repeat identity crime victims exceeded the number of first-time victims among ITRC victims and consumers. Forty-one percent (41%) of ITRC victims and 69 percent (69%) of consumers said they were repeat victim of an identity crime (not including data breaches). That compares to 36% for ITRC victims and 30% for consumers who were first-time victims.

· More ITRC victims and general consumers received data breach notices in the past year than those who did not receive a breach notice. One-third (33%) of ITRC victims and 23% of general consumers received between two and five notices.

· Using the same password on multiple accounts leads to identity crimes, yet most ITRC victims and general consumers said they did just that. Fifty-six percent of ITRC victims and 59% of general consumers admit to using the same or similar passwords on all accounts.

· Credit freezes are very effective at preventing fraudulent accounts requiring a credit check, but 31% of ITRC victims and 22% of general consumers reported they had a freeze in place.

U.S. News & World Report Identity Theft Survey

U.S. News 360 surveyed 2,000 U.S. adults — all of whom had experienced identity theft — about their experiences with identity fraud, social media identity theft, SMS phishing, identity theft precautions and more. Survey responses were weighted in order to be representative of the U.S. population. The survey found nearly three-fourths (73%) of respondents experienced one case of identity theft but more than a quarter (27%) experienced identity fraud more than once. Nearly one in five (18%) continue to face financial loss as a consequence of identity theft.

Jeff Kinney, senior technology editor, U.S. News & World Report's 360 Reviews.

“The survey highlights the myriad of ways Americans fall victim to identity theft and their top privacy concerns today,” said Jeff Kinney, senior technology editor, U.S. News & World Report's 360 Reviews . “U.S. victims of identity fraud most fear a financial account takeover, more so than a home break-in — in fact, one in three respondents (33%) have already experienced a financial account takeover at least once.”

Additional survey highlights include:

· The majority (64%) of identity theft victims did not have any identity theft protection when the incident occurred.

· Forty-four percent (44%) report seeking legal action after becoming a victim.

· Since experiencing identity fraud, most (89%) report taking extra precautions to protect themselves against future identity theft.

· More than three in five (62%) report continuing to use public Wi-Fi networks — which can have security weaknesses

The report explained in some cases, identity theft occurs when consumers give up sensitive personal data to fraudsters through phishing or other scams, but others fall victim due to breaches of online platforms or services. Identity fraud may mean financial loss through account takeovers or text message phishing scams as well as losing control of accounts on social media to impersonators, who can then try to scam friends and contacts.

For example, in July 2023 HCA Healthcare announced the display of personal data from some 11 million patients in a breach exposing names, birthdates, email, and telephone numbers. A Tesla breach revealed in August 2023 exposed data from some 75,000 employees, including Social Security numbers. Nearly one in three (30%) in the U.S. News & World Report's 360 Reviews survey said were victim to at least one company data breach in 2023.

When asked to rank a list of events from most to least concerning, survey respondents specified their biggest concern is a financial account takeover — more so than a home break-in. One in three (33%) respondents also report experiencing a financial account takeover at least once.

The survey found 71% of respondents discovered their identity stolen within a week, some did not learn of the fraud for more than a month (11%) or even for more than a year (6%). Among respondents, the largest share said they discovered identity theft through fraudulent credit card charges, compromised banking accounts, or a stolen Social Security number. One in three (34%) respondents reported losses between $100-$500 while experiencing identity fraud, 15% reported financial losses greater than $1,000.

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