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Identity Fraud Soars in 2021, Topping $52 Billion in Losses

The numbers are in, and it’s not happy news. In 2021, traditional identity fraud was higher than ever, and instances have risen 79% over 2020 numbers. On top of this, the number of people in the US that have been impacted by identity fraud rose by more than 50%, meaning there are 15 million people who suffered through identity fraud this past year.

Identity Fraud

On top of this, research shows that these losses from identity fraud scams, where a fraudster tricks a victim to give up personal information, topped $52 billion in losses, and it affected a total of 42 million people in the United States.

According to researchers, cybercriminals went back to basics this year, and they mostly focused on tactics like malware and bots, in addition to other traditional identity fraud scams. These criminals are also doing things like changing tactics in an attempt to remain undetectable and to maximize the amount of info that they can get from their victims.

We are Also Seeing Huge Shifts in How Criminals are Working

Another thing that we have noted in 2021 is that we saw a huge increase in account takeover fraud as well as new account fraud, which means the bad guys are using a number of different methods to get what they want, and this is resulting in billions of dollars lost.

We are learning that:

  • There was a 109% increase in new account fraud, which allows criminals to obtain enough consumer information to open accounts, including credit card accounts and merchant accounts.
  • There was a 90% increase in account takeover losses, too, thanks to the ability of these criminals to highjack the online lives of victims.
  • There was a 69% increase in fraud with credit cards that already exist, too, while fraud on non-card accounts, like bank accounts, utilities, and insurance, has increased by 73%.

The personal impact of identity fraud also grew more in 2021, as the average loss rose from $201 per incident to $1551, and people have spent a total of around nine hours, on average, trying to settle these issues. This just cements the fact in place that identity fraud is extremely damaging, and that industries, where these things happen, need to have more empathy for both the emotional and financial toll that ID fraud takes on victims.

Attitudes Towards Efforts for Preventing and Recovering Losses

These facts are also giving us a look at attitudes towards things like preventing and recovering losses, as well as attitudes towards security. This shows us that people have very high expectations that their financial institutions will do more to help them if they get stuck in a situation like this. More than half of fraud victims want their banks, for instance, to offer some sort of help to get through identity fraud, as many do not right now.

Consumers also want more fraud prevention education as well as identity protection services. When you consider that 1 in 20 people in the US were victims of fraud in 2021, it’s essential to have some sort of recovery help in place. Account takeovers are rising, and consumers need to understand how valuable protection can be, even if it’s in the background, such as applying fraud alerts or credit freezes to their accounts.

Tips to Help You Protect Yourself

It is fairly easy to protect yourself from account loss and identity fraud. Here are some tips:

  • Freeze your credit. When you do this, it will be impossible for anyone to open a new account in your name… even yourself… until you lift the freeze.
  • Consider getting identity theft coverage through us, Protect Now, your employer, or a third party. Though it is not a fool-proof method, it can make it much easier to stop cybercriminals.
  • Use a browser program that can tell you if you are navigating to a website that might be dangerous. With these programs, you will know immediately if a site you want to click on could be malicious.
  • Use two-factor authentication when you can. You should also consider signing up for text/email “push” alerts for social media, bank accounts, and email accounts.
  • Use a password manager to keep your passwords safe. Also, make sure that you use a different password for every account you have.
  • Take some time to learn about common online scams. You should have some knowledge of what phishing, scareware, ransomware, and other scams are.

Written by Robert Siciliano, CEO of Credit Parent, Head of Training & Security Awareness Expert at Protect Now, #1 Best Selling Amazon author, Media Personality & Architect of CSI Protection Certification.

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