Four significant numbers contribute to the understanding of how large a problem we face when we examine financial identity theft. The numbers are 50 billion; 15 million; 3.5 thousand; and, 25.
Placing those four key numbers in context explains why every year the U.S. Department of Justice and the Federal Trade Commission identify financial fraud from identity theft as one of the greatest threats to our nation.
Each year, approximately 15 million Americans are identity theft victims with financial losses to the country totaling close to $50 billion. The average loss associated with each case of identity theft is approximately $3,500 and the average amount of time each victim expends recovering from the consequences of identity theft is twenty-five hours.*
The problem of financial loses associated with identity theft is so pervasive in many communities around our country that Santa Rosa, CA Police Sgt. Mike Lazarini recently stated, "We get more reports of identity theft every day than traffic accidents." Indeed, many counties around the United States report that identity theft is the top property crime within their jurisdiction.
While the numbers are shocking, they only tell the story from the perspective of statistics. Behind every statistic is an American whose life has been altered. Perhaps they were only inconvenienced briefly when their credit card company called to ask if they’d made a suspicious purchase at an electronics store. Or, perhaps their life was irrevocably turned upside down when – upon being denied a mortgage to buy their dream home or a student loan to continue their education – they learned an identity thief had stolen their good name and left a path of financial destruction.
For a number of years now, financial identity theft has arguably been the most pervasive crime in the United States.
Ask any gathering of Americans how many have been victims of identity theft resulting in financial information or services being compromised and usually more than half will raise their hands. Consequences from financial identity theft include:
- Damaged credit
- Credit and debit card fraud
- Checking and savings account fraud
- Investment account fraud
- Mortgage and other loan fraud
- Tax fraud
Unfortunately, financial identity theft is so common in the United States, most businesses and consumers consider identity theft resulting in financial fraud a cost of doing business. Many businesses incorporate financial losses resulting from identity theft into the bottom line rather than combat the crime in a meaningful way.
High dollar loss thresholds at local, state and federal law enforcement agencies often restrict investigations and prosecutions to only the most severe or high-profile cases. Subsequently, very few cases of identity theft – as a percentage of the total number of victims – are ever prosecuted and identity criminals continue to commit crimes at will.
Because it is almost a given you will be a victim of identity theft at least once during your lifetime, it is important to take steps to protect yourself, your family and your business. While there is not a single method or product (contrary to advertisements you see and hear on a daily basis) that will completely protect you from financial identity theft, there are methods and products that can assist you in protecting your financial identity to the highest degree possible.
Above all else, you should personally monitor your financial accounts and records on a regular basis. This is important even if you use commercial services to monitor, protect or insure your personal information.
For more information on how to combat all forms of identity theft – including financial – please visit our ID Theft Prevention, Protection and Recovery categories.
* Based on a range of information gathered from public and private resources.