Identity Theft increases for 2009, but consumer impact falls.

Predictably, incidents of identity theft hit an all-time high in 2009, according to the latest study by Javelin Strategy & Research.

This really isn’t much of a surprise, what with the economy in its current state. However, it seems the actual impact on consumers has either leveled off or decreased. In other words, while more people were victimized last year, it cost them less time and money to fix. Key findings from the study:

  • The actual number of adult identity theft victims hit 11.1 million in 2009, an increase of 1.2 million over 2008 (and after a decrease of 2 million from 2003 to 2007).
  • As a percentage of the population (4.8%), this represented an increase of 0.5%. Interestingly, however, this was only an increase of 0.1% over 2003, the previous high-water mark for number of identity theft victims.
  • The overall fraud amount hit $54 billion, an increase from 2008, but still less than the peak of $60 billion in 2004.
  • The mean (average) fraud amount was $4,841, which was stable from 2008. This number has actually decreased every year since 2004.
  • The mean consumer cost was $373, a drastic decline since 2004, when this amount peaked at $746.
  • The average resolution time also continued to decrease, down to 21 hours in 2009. This shows a vast improvement over 2005, when the average was 40 hours.

So what does all this data mean?

It seems to indicate that, while there were a lot more victims in 2009 in sheer numbers (yet only 0.1% more than 2003), identity theft isn’t quite as difficult as it once was to resolve. Basically, procedures are now in place to help victims deal with this crime, whereas everybody was still sort of flailing five or six years ago.

From 2003 to 2005, it actually seems to have become more difficult to resolve identity theft, according to past Javelin studies. I think a lot of businesses and municipalities were just beginning to understand the seriousness of identity theft during those years, and their early attempts to deal with the problem probably weren’t as efficient as they would later become.

Federal, state and local laws have also begun to catch up to the reality of the situation in the last few years, but I think consumer vigilance has played a key role in this trend. In general, people are more aware of the dangers and more aware of the signs, and as a greater portion of the population begins using online financial tools (which operate in real time, or as close to it as you can get), more people are catching the fraud sooner, and swift action is always best in these cases.

Don’t get me wrong. It’s still a pain to have your identity stolen, but at least it’s begun to cost less time and money to resolve the damage. You don’t want to lose 21 hours or $373, but it beats 40 and $746 by a long shot.

It’s worth noting that this study focuses on adult financial identity theft. The traditional scenario of “thief takes identity, thief opens credit card, thief goes shopping” has actually decreased, according to information I’ve encountered. Criminal, employment, child and medical identity theft, meanwhile, have become somewhat more prevalent.

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