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December 19, 2010

11.7 MILLION Victims of Identity Theft in U.S.

According to a survey conducted in 2008, the results of which were just released on December 16, 2010, by the Bureau of Justice Statistics, an estimated 11.7 million U.S. citizens were victims of identity theft during the two year period prior to 2008.

The losses from this vast number of instances of identity theft totalled more than $17 billion (with a "b").

However, the definition of identity theft used in the survey was quite broad.  It included what we have discussed on this blog as actual identity theft (i.e. the fraudulent use of someone's personal identifiers to open new accounts) as well as account take over (where an existing legitimate account is used by someone other than an authorized user for their personal gain). 

In my experience, many more people are victims of account takeovers than identity theft, so this seriously skews the numbers of this survey.  In fact, I was a victim of an account take over between the period of 2006 and 2008 when someone in Germany made three fraudulent purchases with my Discover card.  My experience was like most who are victims of account takeover.  It was all fixed with a simple call to my credit card.

Identity theft, on the other hand, is never that simple to fix.  It usually takes years of vigilance and time spent by the victim making phone calls, writing letters and generally proving his or her innocence because, unlike in the criminal justice system, the identity theft victim is considered guilty until he proves his innocence and, usually, even after he has proven his innocence time and time again.

According to the survey, the average loss was only $1,870.  This again is skewed by the inclusion of account take over in the identity theft definition the survey used.  I would think that most account take over victims suffer either no financial loss or possibly the cost of a stamp or two.  Identity theft victims, on the other hand, suffer much greater financial loss, usually in the several thousands of dollars.  That's if they are not sued and forced to hire an attorney by the hour to defend them from the frivolous lawsuit against them.  Of course, if they hire someone like me to represent them in a lawsuit against the credit bureaus and/or the fraudulent credit grantors, the attorney should not charge by the hour but should instead be paid a contingency fee after successful resolution of the lawsuit.

Also, 16 percent of the victims in the survey were the victims of multiple types of identity theft, such as the traditional version and attempts to obtain government or health insurance benefits.  I recently represented a victim of identity theft whose brother used his identity to obtain student loans and eventually went to work for Fed Ex in Memphis using my client's Social Security number.  This resulted in my client suffering the tax burden of his brother's wages.  Very much a mess that took a lawsuit against Sallie Mae and others to straighten out.

More stats from the survey -

  • 6.2 million were victims of actual or attempted account take overs of traditional credit cards;
  • 4.4 million were victims of actual or attempted account take overs of debit cards;
  • 1.7 million were victims of true name identity theft;
  • Income matters - those with a household income of more than $75,000 were more likely to be victims;
  • Gender does not matter - men and women are equally likely to be identity theft victims;
  • Only about 17 percent reported the crime to law enforcement (but this again is skewed by the inclusion of account take over victims in the definition of identity theft);
  • Approximately 20 percent described the identity theft as "severely distressing" (again skewed by the inclusion of account take over); and
  • Nearly 40 percent had some idea how their personal identifiers were compromised.
All in all, some pretty interesting results.

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