Guest Editorial: Online scammers keep getting craftier

Farmington Daily Times
Guest Editorial

Once upon a time, stealing a person's identity would have seemed far-fetched. The stuff of movies. Now it appears to be easy. And the problem is growing.

The 2018 Identity Fraud Study released in February by Javelin Strategy & Research revealed that the number of identity fraud victims increased by 8 percent (rising to 16.7 million U.S. consumers) in the last year, a record high since the firm began tracking identity fraud in 2003.

The study found that, despite industry efforts to prevent identity fraud, fraudsters successfully adapted to net 1.3 million more victims in 2017, with the amount stolen rising to $16.8 billion. With the adoption of EMV (embedded chip) cards and terminals, the types of identity fraud continued to shift online and away from physical stores.

The complexity of fraud is also on the rise. This last year saw a notable change in how fraud is being committed. While credit card accounts remained the most prevalent targets for new account fraud, there was significant growth in the opening of new intermediary accounts, such as email payments (e.g. PayPal) and other internet accounts (e.g. e-commerce merchants such as Amazon) by fraudsters.

The study also found three significant changes in data breaches in 2017.

 Nearly a third (30 percent) of U.S. consumers were notified of a breach in the past year, up from 12 percent in 2016.

 For the first time ever, Social Security numbers (35 percent) were compromised more than credit card numbers (30 percent) in breaches.

 Finally, data breaches are causing consumers to lose trust in institutions.

"2017 was a runaway year for fraudsters, and with the amount of valid information they have on consumers, their attacks are just getting more complex," said Al Pascual, senior vice president, research director and head of fraud and security, Javelin Strategy & Research. 

The 2018 Identity Fraud Study found four significant trends, including:

 Record high incidence of identity fraud - In 2017, 6.64 percent of consumers became victims of identity fraud, an increase of almost a million victims from the previous year. This increase was driven by growth in both existing non-card fraud and account takeover.

 Account takeover grew significantly - Account takeover tripled over the past year, reaching a four-year high. Total ATO losses reached $5.1 billion, a 120 percent increase from 2016.

New this year, the 2018 Identity Fraud Study examined the impact the relentless news about data breaches is having on consumers. With rising fraud incidence and extensive media coverage of the Equifax breach, the proportion of consumers who are concerned about fraud rose from 51 percent in 2016 to 69 percent in 2017. Breaches rank at the top of identity-related threats facing consumers according to those surveyed.

But the finding that is most revealing and should come as no surprise is the feeling of helplessness that most people have.

Javelin found 63 percent of consumers report that they are "very" or "extremely" concerned about the threat of breaches, but many are unsure that they have the ability to effectively protect themselves. 

All of this combined caused consumers to shift the perceived responsibility for preventing fraud from themselves to other entities, such as companies storing their data.

Some things don't change. Looking for someone to blame for an intractable problem remains as much a part of human nature in the computer age as ever. 

The Times and Democrat of Orangeburg, South Carolina, Feb. 21