Wednesday, June 12, 2024

Identity Theft Picking Up Speed

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Identity theft continues to plague online users and it’s taking a toll on lenders, who are being urged to fight online fraud more aggressively.

Last year, there were 161,819 cases of identity theft reported to the U.S. Federal Trade Commission (FTC). The FTC also reported that identity fraud complaints were the most common type of fraud complaint reported by American consumers in 2002, accounting for 43 percent of all FTC complaints. Nationwide, identity theft reports nearly doubled last year, totalling more than 160,00 with losses of more than $343 million.

That brought the total number ofreported U.S. cases of identity fraud to nearly 300,000 since the launch of a database clearinghouse in 2000, according to the TowerGroup, a research firm focused on the global financial industry.

But consumers aren’t the only ones feeling the ill effects of identity theft, says a TowerGroup report.

Lending institutions are getting hit hard. A recently released TowerGroup report notes that U.S. lender losses due to identity theft total more than $1 billion annually.

”Lenders have always been willing to accept a certain amount of risk,” says Christine Pratt, a senior analyst at the TowerGroup Consumer Credit practice. ”Fraud losses, if they’re not actively rising, have been an area of complacency… Financial institutions should take a strategic, enterprise-wide approach to implementing technology solutions to deal with fraud, and identity theft in particular.”

Pratt adds that the creation of an industry initiative or consortium that could link key information databases — maybe even in partnership with U.S. credit bureaus — could produce a major payback for the industry.

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