Online ID Theft Hyped
Does this surprise anyone?
While keylogging software, phishing e-mails that impersonate official bank messages and hackers who break into customer databases may dominate headlines, more than 90% of identity fraud starts off conventionally, with stolen bank statements, misplaced passwords or other similar means, according to Javelin Strategy & Research.
“An insignificant portion of identity fraud actually starts with the Internet,” said James Van Dyke, president of Javelin, who pointed out that many firms still rely on simple security questions such as one’s mother’s maiden name. “The Internet always grabs the headlines, but it is individuals who are close to the victims, such as family and friends, that are doing most of it,” he said.
While fraudsters often use the Internet to access existing bank, phone or brokerage accounts or to create new ones using stolen details, in only one out of 10 of those incidents did the actual theft of the personal data take place through e-mail or the Web or somewhere else on the Internet, according to Javelin. “No matter how you slice the data, it’s really hard to arrive at a scenario where the Internet could be the source of the majority of identity fraud,” Van Dyke said.
All told, 4% of Americans were affected by identity fraud in 2005, a statistic that is slowly shrinking, though the value of each fraud incident is growing, Van Dyke said. The total losses attributed to identity fraud has held steady the past three years.