Monday 22 March 2010

The IC3 report -- an exponential rise in identity theft

The IC3 issued its annual online crime report, which reported that losses almost doubled from 2008 to 2009. In 2009, the losses totaled $560m (£371m) vs. $265m (£176m) in 2008. What is interesting to us in the security industry is an even greater increase in identity theft between the two years.

In 2008, identity theft accounted for 2.5 percent of the claims; in 2009, the number is 14.1 percent, an increase of 564 percent. We should note that in 2009 the IC3 issued a new complaint class system that consolidated the amount of categories from 157 to 79. However, we do not believe that the smaller amount of categories had a marked effect on the increase in identity theft cases.

Rather, what is happening is that the online criminal is progressing from one-off fraud schemes to more sophisticated stealing of personal data for increased and prolonged gain. Personal data is a far more valuable commodity and over the past year, these US criminals have both realized this and found ways in which to obtain and use this data. The Internet provides a channel that can easily be manipulated to appear reputable, while also allowing the criminal crucial anonymity.

For the US consumer, the stakes are higher, in that identity theft is a far more devastating crime than one-off cyber-stealing. The consumer should be on alert and vigilant whenever he is sharing personal information.