Identity Theft | Image Source : Hiteidtheft.com
A new study shows that banks, not consumer victims, are increasingly feeling the pain of digital fraud.
Identity theft often feels less like a random act of fraud than a personal breach of a victim’s secrets. But while consumers feel the sting from having their private data stolen, it’s their banks that are increasingly picking up the bill.
That’s one finding from an identity theft study released Wednesday by fraud analysis firm Javelin Research. The study, which surveyed around 5,000 Americans last year about their experiences with identity theft, calculated that ID fraud had cost around $54 billion in 2009, a significant jump from the $48 billion it estimated for 2008. That higher cost was driven by a greater number of fraud incidents that affected 11.2 million consumers in 2009, compared with 9.9 million in 2008.
That means financial services are absorbing a much larger chunk of fraud losses, says Javelin president James Van Dyke. “Businesses are really stepping up,” he says. “Even as the cost of fraud mitigation becomes higher, they’re bringing the out-of-pocket expense for victims closer and closer to zero.”
And why are banks willing to cover a larger percentage of those fraud costs? Van Dyke posits that the firms are dealing with consumers’ increasing impatience regarding data security issues and the growing problem of losing customers after fraud incidents. In about one out of five cases, according to Javelin’s research, a victim of identity theft switches banks. “Acquiring a new customer can costs hundreds of dollars, and banks are becoming more and more sensitive to the cost of losing that relationship,” he says . Read more ……
Identity theft is a term used that is to refer to fraud that involves someone pretending to be someone else in order to steal money or get other benefits. The term dates to 1964[1] and is actually a misnomer, since it is not inherently possible to steal an identity, only to use it. The person whose identity is used can suffer various consequences when he or she is held responsible for the perpetrator’s actions. In many countries specific laws make it a crime to use another person’s identity for personal gain.Identity theft is somewhat different from identity fraud. However, the terms are often used interchangeably. Identity fraud is the result of identity theft. Someone can steal or appropriate someone’s identifying information without actually committing identity fraud. The best example of this is when a data breach occurs. There has been very little evidence to link ID fraud to data breaches. Source : Wikipedia
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