Identity Theft Impacts Nearly Half of U.S. Consumers, Aite Group Report Finds

Identity
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Underwritten by GIACT, Aite Group Report Discovers Alarming Percentages of U.S. Consumers Impacted by Identity Theft, Application Fraud and Account Takeover

DALLAS, March 9, 2021 – GIACT®, the leader in helping companies positively identify and authenticate customers, today announced a new report, U.S. Identity Theft: The Stark Reality, developed by Aite Group, and underwritten by GIACT, that uncovers the striking pervasiveness of identity theft perpetrated against U.S. consumers. The report also tracks shifts in banking behaviors adopted as a result of the pandemic.

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According to the report, from 2019 to 2020, almost half (47%) of U.S. consumers surveyed experienced identity theft; well over one-third (37%) experienced application fraud (i.e., the unauthorized use of one’s identity to apply for an account)., and over one-third (38%) of consumers experienced account takeover over (i.e., unauthorized access to a consumer’s existing account) over the past two years.

“This report represents one of the most comprehensive recent reviews of identity theft and account takeover, and marks an inflection point for the industry. 2020 not only saw an increased reliance on digital banking, payments and online accounts, but also increased rates of fraud. Without meaningful action taken by businesses, financial institutions and others, fraud will unfortunately continue to flourish. Education, along with the implementation of enhanced anti-fraud protections, is needed.”

Shirley Inscoe
Senior Analyst, Fraud & AML Practice, Aite Group

The report also found serious consumer dissatisfaction with the assistance provided to victims following an identity theft attack. Among those dissatisfied with the assistance provided, nearly half (42%) of those who experienced identity theft related to a new credit card fraudulent application and over half (56%) of those who experienced consumer loan application fraud said they were unlikely to do business with the at-fault financial institution in the future.

Identity fraud will continue to flourish

What is more, on average, nearly one-third of surveyed consumers detected checking, credit or consumer loan fraud on their own. Less than a quarter were notified by their financial institution or by the financial institution where the fraudulent account was opened. And nearly a quarter on average were notified by a collection agency.

“This report represents one of the most comprehensive recent reviews of identity theft and account takeover, and marks an inflection point for the industry,” said Shirley Inscoe, senior analyst for Aite Group’s Fraud & AML practice. “2020 not only saw an increased reliance on digital banking, payments and online accounts, but also increased rates of fraud. Without meaningful action taken by businesses, financial institutions and others, fraud will unfortunately continue to flourish. Education, along with the implementation of enhanced anti-fraud protections, is needed.”

Consumer reports of identity fraud on the rise

The report’s findings coincide with a shift towards newer digital payments methods and accounts during the pandemic. The report found that, in 2020, over one-third of those who used a new payment product or service (34%) or a new method of banking (37%) experienced identity fraud. An outcome that is likely due to higher rates of fraud activity.1

“The report highlights the vast impact that identity theft and account takeover has had across almost every type of account — from checking, mobile phone, to mortgage, tax, healthcare and benefits. Consumers rely on these online accounts to make every type of transaction and purchase. Fraud operators know that, and have taken full advantage,” said Melissa Townsley-Solis, Head of GIACT. “Identity theft has become significantly more evolved and sophisticated over the past few years. Businesses and financial institutions must keep up. To combat fraud, they will have to ramp up their customer authentication process by monitoring and validating their consumers at every touch point, throughout the customer lifecycle. And with so much personally identifiable information already exposed and publicly available, they will also have to improve and diversify the types of data being used.”

The report’s contents include the incident rate of identity theft; application fraud; account takeover fraud; impacts of the pandemic on banking; and recommendations.

To access the full report, click here.

About GIACT

GIACT®, a Refinitiv company, is the leader in helping companies positively identify and authenticate customers. Since 2004, GIACT has been empowering businesses across all industries with data-driven insights to prevent identity and payments fraud and improve compliance procedures, all through a single platform — the EPIC Platform®. For more information, visit www.giact.com or call 1-866-918-2409. Follow us on LinkedIn and Twitter.

Citations:

Federal Trade Commission, Consumer Information, “The top frauds of 2020,” by Monica Vaca, posted February 2, 2021. URL reference: https://www.consumer.ftc.gov/blog/2021/02/top-frauds-2020.

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