ID fraud incidents on decline

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But costs rise.

Incidents of identity fraud declined last year, but the cost per incident rose, and consumers are taking longer to respond to occurrences of theft, according to a US survey.

The eighth annual Identity Fraud Survey Report polled 5000 US adults, concluding that the number of identity fraud incidents decreased 28 percent in 2010. Overall, 8.1 million fell victim to identity fraud last year, down from 11.1 million the year before, wrote analysts at released Javelin Strategy and Research.

It may be attributed to a decline in reported data breach incidents; 7 percent of respondents said they were notified of a breach last year, down from 11 percent who were notified the year prior.

The number of publicly reported breaches has decreased by nearly one third – from 604 incidents involving 221 million records in 2009 to 407 incidents involving 26 million records last year, according to the study, which cites data from

Moreover, total fraud losses decreased from $56 billion in 2009 to $37 billion in 2010 last year, according to the Javelin study.

“The fact that identity fraud is down is a good thing,” said Steve Schwartz, executive vice president of consumer services for risk management services provider Intersections, the study's sponsor,

“It could mean that consumers and institutions have taken notice, and are doing things to help mitigate the crime. We don't want people to say, though, that it is down and I can relax because we don't think that's the case at all.”

Although it showed that fraud losses were down, the average consumer out-of-pocket costs an incident rose two thirds to $631.

That was attributed to a shift in the type of fraud, said Javelin founder James Van Dyke.

The misuse of credit card numbers, the type of fraud considered least damaging to consumers because it was covered by a bank's zero-liability protections, declined significantly last year, he said. During the same period the rate of new account fraud, which occurred when a fraudster established an account in a victim's name, was steady.

New account fraud was often harder to detect and resulted in longer periods of misuse than other types driving up the average cost.

"Criminals move around to the areas that are most lucrative and easiest to get at," Schwartz said.

The average fraud resolution time rose to 33 hours from 21 hours the year prior, likely because instances of debit card fraud are becoming more complicated and fewer consumers are enrolling in identity protection services due to economic constraints, according to the study.

This article originally appeared at

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