The number of identity fraud victims increased by 16% in 2016 to 15.4 million U.S. consumers. A new study found despite the efforts of the industry, fraudsters successfully adapted to net two million more victims this year with the amount fraudsters took rising by nearly one billion dollars to $16 billion.
The 2017 Identity Fraud Study by Javelin Strategy & Research, also reveals a resurgence in existing card fraud in 2016, which saw an increase of 40% in card-not-present (CNP) fraud. The study says the increase in EMV cards and terminals was a catalyst for driving fraudsters to shift to fraudulently opening new accounts.
On a positive note, while fraudsters are becoming better at evading detection, consumers with an online presence are getting better at detecting fraud quicker, leading to less stolen overall per attempt.
After reaching a low point in 2014, both account takeover incidence and losses rose notably in 2016. Total ATO losses reached $2.3 billion, a 61% increase from 2015, while incidence rose 31%. Account takeover continues to be one of the most challenging fraud types for consumers with victims paying an average of $263 out of pocket costs and spending a total of 20.7 million hours to resolve it in 2016 – 6 million more than in 2015.
As EMV cards and terminals continue to permeate the US POS environment, fraudsters shift to fraudulently opening accounts that allow them. At the same time, fraudsters have become better at evading detection, with new-account fraud (NAF) victims being notably more likely to discover fraud through review of their credit report (15%) or when they were contacted by a debt collector (13%).
Javlein found digitally connected consumers have extensive social network activity, frequently shop online or with mobile devices, and are quick to adopt new digital technologies. Twenty-five percent of these consumers used a P2P payment service in the past week. Digitally connected consumers have a presence on an average of 4.9 social networks, are predominantly female. This also exposes them to greater risks, a 30% more risk to be a fraud victim.