The 2018 Identity Fraud Study released by San Francisco-basedJavelin Strategy & Research, revealed identity fraud victimsincreased by 8% (rising to 16.7 million U.S. consumers) in the lastyear.

The online survey of 5,000 U.S. consumers found despite industryefforts to prevent identity fraud, fraudsters effectively alteredcourse to net 1.3 million more victims in 2017, with the amountstolen rising to $16.8 billion. The rising ID theft trend causedconsumers to shift the perceived responsibility for preventingfraud from themselves to other entities, such as their financialinstitution or the companies storing their data.

With the evolution to EMV cards and terminal, the types ofidentity fraud continued to swing away frombrick-and-mortars to online opportunities.

Crooks are starting more new accounts as a means of compromisingaccounts consumers already have. While credit card accountspersisted as the predominant marks for new account fraud, there wassubstantial growth in the opening of intermediary accounts, such asemail payments (e.g. PayPal) and other internet accounts (e.g.e-commerce merchants such as Amazon) by fraudsters. Although not aseffortlessly monetized, these account types help fraudsterstransfer funds from their victims' existing accounts, according toJavelin.

Helped by massive and headline grabbing data breaches, suchthe Equifax incident, which exposed sensitive information ofsome 145.5 million Americans, the proportion of consumers concernedabout fraud rose from 51% in 2016 to 69% in 2017. Rightly so,Javelin noted for the first time ever comprised Social Securityaccounts (35%) outnumbered credit card accounts (30%) inbreaches.

Breaches rank at the top of identity-related threats facingconsumers according to those surveyed. Javelin found 63% ofconsumers report that they are very or extremely concerned aboutthe threat of breaches, but many are unsure they have the abilityto effectively protect themselves. Coinciding with that finding,cynicism about breach notifications rose dramatically as well, with64% of breach victims indicating they believe breach notificationsdo little to help protect them and are principally about providinglegal cover for the breached company.

The study found four significant trends:

• Record high incidence of identity fraud. In 2017, 6.64% ofconsumers became victims of identity fraud, an increase of almostone million victims from the previous year. Non-card fraud andaccount takeover drove this increase.
• Account takeover grew significantly, tripling over the pastyear, reaching a four-year high. Total ATO losses reached $5.1billion, a 120% increase from 2016. Account takeover continues tobe one of the most challenging fraud types for consumers withvictims paying an average of $290 in out-of-pocket costs andspending 16 hours on average to resolve.
• With EMV driving more fraudsters to seek online channels forfraud, card not present fraud is now 81% more likely than point ofsale fraud.
• Fraudsters are getting more sophisticated in their attacks, andusing more complex and difficult to detect monetization schemes.One and a half million victims of existing account fraud had anintermediary account opened in their name first.

“2017 was a runaway year for fraudsters, and with the amount ofvalid information they have on consumers, their attacks are justgetting more complex,” Al Pascual, senior vice president, researchdirector and head of fraud & security, Javelin Strategy &Research, said. “Fraudsters are growing more sophisticated inresponse to industry's efforts to implement better security.Fortunately, there are a variety of digital tools that consumerscan leverage to stay better informed on the status of theiridentities and accounts, and to ultimately stay betterprotected.”