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. In the past year, more than 10,000,000 people were identity theft victims, and it is estimated to more than double in the next 12 months.
1 in 6 people have already become a victim of identity theft.
Over 244,000,000 American’s identities have been reported lost, stolen, or exposed since January, 2005*—privacyrights.org. A person can spend a lifetime building a reputation for financial reliability, only to be victimized by identity theft, a crime that can quickly undermine one’s good credit.
Financial Identity Theft: The most prevalent identity theft. This type of identity fraud involves credit and debit card fraud, checking and saving account fraud, mortgage and loan fraud, computer fraud, telecommunication fraud, tax fraud, and numerous other financial frauds.
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.*
Credit card fraud – More than half of all victims said that either a credit card account was opened in their name or an existing account was being used without authorization. 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.
Bank fraud – The thief either opens an unauthorized checking or savings account in another person’s name or writes checks on someone else’s account, sometimes after stealing checks. Currently there are 25 types of financial identity fraud being investigated just by the United States Secret Service. This doesn’t even take into account the types of financial fraud being investigated by other agencies.
Financial theft victims can suffer great financial loss due to credit card fraud, medical fraud, attorney fees, liability and loss of work. An identity thief uses the victim’s identity to obtain a fraudulent loan for a car or other item. Credit identity theft is most likely to happen when you type in your account number in an unsecured website. Because identity thieves open fake accounts at billing addresses that are different from yours, it’s easy for them to run up charges without your knowledge.
Credit damage is particularly dangerous when it happens to children with stolen identities because it could be years before they attempt their first financial transaction and realize that their credit has been ruined. Because it often takes a long time to realize that you’ve become a victim of financial identity theft, the damage can mount, you might be facing multiple fraudulent charges, damage to your credit report, and other issues that take considerable work and expense to repair.
70% of identity theft victims have trouble getting rid of or are unable to delete negative information in their records. Many families also have to declare bankruptcy because of an identity theft that destroys their credit and ability to work.
Did you know that 59% of new account fraud that occurred in 2008 involved opening up a new credit card and store-branched credit accounts (Javelin Strategy and Research, 2009).
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