2008 Research Report: Both Good and Bad News

Earlier this year, Javelin Strategy & Research published their fourth annual Identity Fraud Survey Report. The (2008) report contained a number of items. Some are positive, others disconcerting.

The most significant good news is that identity fraud actually declined slightly. The previous estimate of the cost of identity fraud was $51 Billion, the report identifies a decline to an estimate of $45 Billion. While somewhat encouraging in terms of overall losses, $45 Billion is still a pile of cash and no one should feel they have a reason to become complacent.

To underscore the need for continued vigilence, the fraudsters continue to test new tactics and try new approaches. Significantly among these new tactics is something called Vishing. Vishing is defined as combination of Internet Telephony (VoIP) and Social Engineering.

With Vishing (like its twin Phishing) the purpose is to get you to divulge useful details about your identity so that it may be stolen. A typical attack can involve Interactive Voice Response (IVR) systems controlled by the fraudster making a telephone call to your home phone, cell phone, or office phone. The system fraudulently identifies itself as a charity or other non-profit, a utility company, government, bank, or other billing or financial organization. The system then asks a number of questions and confirms a number of details designed to entice you into divulging your identity (Social Security number, account number, etc.).

These new vishing attacks now account for 40 percent of identity fraud in 2007. This is a stunning number given that the same attack accounted for only 3 percent in the prior year.

Identity theft is also becoming more costly each time it occurs. In 2006, the average cost was $554 per incident. In 2007, that figure grew to $691.

The report concludes with six recommendations for consumers to protect themselves from identity theft. At the very top of the list is credit monitoring. That is a service we provide here at Merchants. Not only can we watch your credit, we send you email alerts, and can act as your agent to resolve and ID theft event were to occur.

Our suite of services for identity theft protection is robust, comprehensive, and available. Stop by the website or give us a call (toll-free at 1.800.966.0576), see how we can help keep you safe.