Twenty-five percent of American consumers were impacted by identity theft in 2021, according to a new report from GIACT and Aite-Novarica, keeping pace with record levels of ID theft in 2020.
Not only did the survey show that one-quarter of American adults had been victimized by identity theft, but findings further indicate that consumers are more wary of the potential for financial fraud and may be quicker to blame institutions. About 40 percent of consumer loan application fraud victims said they were less likely to do business with the financial institution that allowed the fraud to take place — double the 20 percent rate in 2020.
“The methods fraudsters use to commit identity theft continue to evolve and grow more sophisticated,” Shirley Inscoe, strategic adviser at Aite-Novarica Group and author of the report, said in a news release. “Firms should review and enhance current application controls and Know Your Customer processes to protect customers against identity theft. This will help reduce fraud losses and improve regulatory compliance as well.”
Here are some additional findings from the report:
- The share of Americans experiencing identity theft declined slightly (two percentage points) between 2020 and 2021, a factor the report’s authors believe is related to the ending of state and federal pandemic subsidy payments.
- The share of older Americans experiencing identity theft rose sharply, climbing from 12 percent in 2020 to 25 percent in 2021.
- While checking accounts, credit cards and mobile phone accounts represent the most common targets of application fraud, a new target emerged: buy now, pay later (BNPL) programs. The report found that 23 percent of those affected by application fraud schemes were targeted through BNPL payments.
- Peer-to-peer (P2P) payment systems continued to be large targets, accounting for one-quarter of account takeover reports. And unlike credit cards, consumers were much less satisfied with the P2P recovery process (82 percent were satisfied with credit card recovery; 63 percent were satisfied with P2P recovery).
- Nearly one in three account takeover victims claimed that they moved their account to another financial institution as a result of account takeover.
“The findings in the 2021 report send further alarming signals about the evolution of identity theft where one-quarter of the U.S. population has likely been impacted by fraud in just the past year,” James Mirfin, global head of digital identity and fraud solutions at Refinitiv, GIACT’s parent company, said in the news release. “Financial institutions, businesses and government entities must act now to manage identity risk, with sophisticated tools and data that can stay ahead of fraud’s unrelenting advancements. This continues to be an arms race and the customers are losing out.”
The survey, commissioned by GIACT, was conducted online by Aite-Novarica Group during the first quarter of 2022. A total of 8,520 U.S. consumers 18 and older participated. Download the full report here.