ID Theft Reports Down, Losses Up
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Internet-related identity theft and fraud complaints may be leveling off, but overall financial losses are growing from the security breaches, new data from the Federal Trade Commission (FTC) reveals.
According to the FTC's annual report on fraud, consumer complaints about identity theft top the list, accounting for 255,000 (37 percent) of more than 686,000 complaints filed with the agency in 2005.
In 2004, ID theft accounted for 38 percent of the FTC complaints, down slightly from 2003's 40 percent. The FTC does not report financial losses from ID theft, considering it a form of fraud.
Internet-related fraud complaints accounted for 46 percent of all reported fraud complaints in 2005, with monetary losses of more than $335 million. In 2004, Internet-related fraud complaints totaled 52 percent of all complaints with reported losses of $271 million.
Two years ago, 54 percent of all reported fraud complaints were Internet-related with reported losses of $205 million.
After ID theft, the top sources of Internet fraud complaints originate with online auctions (12 percent), foreign money offers (8 percent) and Internet services (5 percent).
Foreign money offers used to be called Nigerian e-mail scams but, according to Jay Miller of the FTC's Bureau of Consumer Protection, the practice now extends "far and wide beyond Nigeria."
The FTC considers a complaint Internet-related if it concerns an Internet product or service, the company initially contacts the consumer via the Internet or the consumer responds via the Internet.
One category that showed a marked increase was Internet-related fraud complaints with "wire transfer" as the reported form of payment more than tripling between 2003 and 2005.
Unlike credit card payments, wire transfers leave consumers little chance of recovering their losses since the transfer is from bank-to-bank and serves the same purpose as a cash payment.
The FTC's Miller was unsure why the wire transfer form payment showed such an increase in 2005.
"There's really no good science why we get ebbs and flows in our data," he said.
The FTC data also shows that the Washington, D.C., area leads the country in per capita fraud reported, followed by Tampa/St. Petersburg and Seattle.
The major metropolitan areas with the highest per capita reported ID theft are Phoenix, Las Vegas and the Riverside/San Bernardino/Ontario, Calif.