ID Fraud Overblown, Says Online Banking Business - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

IoT
IoT
News
News
1/31/2006
04:47 PM
50%
50%

ID Fraud Overblown, Says Online Banking Business

Of the 53% of identity fraud victims who could name the cause, only 9% identified the online world as the source, according to a banking industry-sponsored survey.

Identity fraud has declined in the last two years, a banking industry-sponsored survey done for the Better Business Bureau (BBB) said Tuesday. The data runs counter to most other estimates of the pervasiveness of online threats posed by criminals and crooks.

According to a telephone poll of 5,000 consumers -- and extrapolations done by Javelin Strategy & Research -- the percentage of Americans affected by identity fraud fell from 4.7 to 4.0 percent between 2003 and 2006. That means the number of consumers tagged by fraudsters also declined, said Javelin, from 10.1 million in 2003 and 9.3 million in 2005, to an expected 8.9 million this year.

More important, said James Van Dyke, principal analyst at Javelin, was that the bulk of fraud begins offline, not on the Internet. "Internet use does not increase the risk of identity fraud," Van Dyke said. "Most data compromise, 90 percent, takes place through traditional offline channels and not via the Internet."

The survey's data showed that of the 53 percent of fraud victims who could name the cause, only 9 percent identified the online world as the source.

That runs counter to most analysts' opinions, as well as that of several surveys done in 2005 which noted that the threat of online fraud had made consumers fearful of the Internet and changed their online behaviors. A Consumer Reports survey done in October 2005, for example, said that 1 in 4 online Americans had stopped buying things on the Web and 1 in 3 had cut back e-purchases over identity theft worries. A more recent study conducted by IBM claimed that three times more Americans bet they'd be victimized by cybercrime than thought they'd be hit by physical crime.

"There are more identity theft attempts made online than offline," said Van Dyke to explain the difference between his survey and others. But that doesn't mean the attempts are successful, he added.

In fact, the Internet can lead to lower damages by those unfortunate enough to be victimized. "Electronic account monitoring is the fastest way to detect fraud," he said, and cited statistics of just 22 days before a fraud is detected for those watching their account balances online. (Those not monitoring accounts take a mean of 67 days to spot fraud, said Javelin's data.)

An expert on identity theft disagreed with the BBB's findings.

"They're ignoring where the growth in identity fraud is," countered Avivah Litan, a Gartner research director. "Offline crime may be most pervasive, but the growth is all in Internet-based crime.

"And remember who sponsors this survey," Litan noted.

Visa, Wells Fargo, and CheckFree -- representing the credit card, online banking, and online bill payment industries -- sponsored the survey.

"You can skin a statistics cat in multiple ways," added Litan.

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Previous
1 of 2
Next
Comment  | 
Print  | 
More Insights
The State of IT & Cybersecurity Operations 2020
The State of IT & Cybersecurity Operations 2020
Download this report from InformationWeek, in partnership with Dark Reading, to learn more about how today's IT operations teams work with cybersecurity operations, what technologies they are using, and how they communicate and share responsibility--or create risk by failing to do so. Get it now!
Slideshows
IT Careers: 10 Industries with Job Openings Right Now
Cynthia Harvey, Freelance Journalist, InformationWeek,  5/27/2020
Commentary
How 5G Rollout May Benefit Businesses More than Consumers
Joao-Pierre S. Ruth, Senior Writer,  5/21/2020
News
IT Leadership in Education: Getting Online School Right
Jessica Davis, Senior Editor, Enterprise Apps,  5/20/2020
Register for InformationWeek Newsletters
Video
Current Issue
Key to Cloud Success: The Right Management
This IT Trend highlights some of the steps IT teams can take to keep their cloud environments running in a safe, efficient manner.
White Papers
Slideshows
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Sponsored Video
Flash Poll