Seven million U.S. adults, or 3.4 percent of U.S. consumers, were victims of identity theft during the 12 months ending June 2003, according to a new survey by Gartner Inc.
With identity theft, a thief takes over a consumer's entire identity by stealing critical private information, such as the Social Security number, driver's license number, address, credit card number or bank account number. The thief can then use the stolen information to obtain illegal loans or credit lines to buy goods and services under the stolen name. Identity thieves typically change the consumer's mailing address to hide their activities.
"Many banks, credit card issuers, cell phone service providers and other enterprises that extend financial credit to consumers don't recognize most identity theft fraud for what it is," said Avivah Litan, vice president and research director for Gartner. "Instead they mistakenly write it off as credit losses, causing a serious disconnect between the magnitude of identity theft that innocent consumers experience and the industry's proper recognition of the crime. This causes a disincentive to fix the problem with the urgency it requires."
Without external pressure from legislators and industry associations, financial service providers (FSPs) may not have the sufficient incentive to stem the flow of identity theft crimes. Gartner analysts said banks and other FSPs must be pressured by consumers and lobbyists to proactively back efforts such as the U.S. Fair Credit Reporting Act, which would cover security and accuracy of personal financial information and access to credit and financial services, and BITS' Work on Identity Theft, which would make it easier for victims to report a crime to financial institutions.
"Most importantly, however, banks and FSPs must implement solutions that effectively screen for application fraud, so they don't wrongfully extend credit to identify thieves," said Litan. "Without industry prevention efforts, consumers whose identities have been stolen will continue to bear the brunt of social and indirect economic costs."
Additional information is available in two Gartner reports that examine the rising trend of identity theft and what solutions are emerging in the market to prevent it. The reports can be purchased on Gartner's Web site.
http://www.gartner.com
Meanwhile, the FBI, in conjunction with national Internet service provider Earthlink, the Federal Trade Commission and the National Consumer's League, began an initiative Monday to raise awareness about the growing problem of Web spoofing scams and to give consumers and businesses important tips on how to protect themselves from these scams.
http://www.fbi.gov/pressrel/pressrel03/spoofing072103.htm
eBay, which is a frequent target of spoof emails, posted an announcement on its boards on Monday warning users of the problem. The announcement contained a link to eBay's "Security Center," which contains information about reporting account theft and fake eBay sites.
http://pages.ebay.com/help/resolving-concerns.html
