High Cost of Identity Thefts
According to market researcher Aberdeen Group, identity theft
is expected to cost consumers, businesses and government organizations
$221 billion in losses worldwide in 2003. Worse yet, those
losses are escalating at a jaw dropping 300 percent compound
annual growth rate, and could reach $2 trillion by the end
of 2005.
At the other extreme, persistent and skilled fraudsters who
comprehensively steal an identity can cause a great deal of
distress to victims. It can take up to 60 hours of work for
a typical victim to sort out their life and clear their name.
In cases where a 'total hijack' has occurred, perhaps involving
20-30 different lenders, it may take the victim as long as
400 hours and cost up to £8000 before things are back
to normal. They may suffer considerable (albeit temporary)
damage to their credit status, which may then affect their
ability to obtain finance or insurance - even a mortgage may
be temporarily compromised
1. Victims now spend an average of 600 hours recovering from
this crime, often over a period of years. Three years ago
the average was 175 hours of time, representing an increase
of about 2470%.
2. Based on 600 hours times the indicated victim wages, this
equals nearly $16,000 in lost potential or realized income.
3. While victims are finding out about the crime more quickly,
it is taking far longer than ever before to clear their records
and High Cost of Identity Theftsrecover from the situation.
4. Even after the thief stops using the information, victims
struggle with the impact of identity theft. That might include
increased insurance or credit card fees, inability to find
a job, higher interest rates and battling collection agencies
and issuers who refuse to clear records despite substantiating
evidence of the crime. This "tail" may continue
for more than 10 years after the crime was first discovered.
5. Based on the ITRC study, today the business community
loses between $40,000 - $92,000 per name in fraudulent charges,
based on reported fraud losses seen by surveyed victims. While
this conflicts with other findings by other groups, there
was a wide range of responses by the ITRC study respondents.
The answer is that we may never know the true financial impact
of this crime due to mis-classification of identity theft
crime definitions by the business community and by victims.
6. The emotional impact on victims is likened to that felt
by victims of more violent crime, including rape, violent
assault and repeated battering. Some victims feel dirty, defiled,
ashamed and embarrassed, and undeserving of assistance. Others
report a split with a significant other or spouse and of being
unsupported by family members.
7. Today victims spend an average of $1,400 in out-of-pocket
expenses, an increase of 85% from years past.
8. Approximately 85% of victims found out about the crime
due to an adverse situation - denied credit or employment,
notification by police or collection agencies, receipt of
credit cards or bills never ordered, etc. Only 15% found out
through a positive action taken by a business group that verified
a submitted application or a reported change of address.
9. Victims report a lack of responsiveness from those entities
to whom they turned for help similar to results reported in
2000*. These include police, collection agencies, credit issuers,
utility companies and financial institutions.
A GAO study on identity theft (GAO-02-363, issued March 2002
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