Tuesday, March 03, 2009

Gartner: Financial Fraud Hits 7.5 Percent of U.S. Adults

Elinor Mills writes on C|Net News:

About 7.5 percent of U.S. adults lost money as a result of financial fraud last year, mostly due to data breaches, according to a new Gartner study to be released on Tuesday night.

In the survey of nearly 5,000 consumers, 70 percent said they had never been a victim of identity theft fraud. Meanwhile 14 percent said they had had their credit card information used to charge purchases or get money, 7 percent said their debit card was used, 6 percent said a new account had been opened in their name, 5 percent had money transferred out of their account, and 4 percent had had checks forged.

Recovering losses was easier for people victimized by brokerage, credit card, and debit card account fraud compared to victims of new loan account fraud, check forgery, and checking/savings account fraud, partly because victims didn't try to recover money.

Of those who had new accounts opened in their name, 35 percent suffered from a damaged credit rating and slightly more than half were able to restore their rating, usually in less than one month. For about 20 percent it took more than a year, and for 9 percent it took three to five years, the survey found.

Overall, less than one-third of the victims reported the crimes to law enforcement and about 5 percent reported it to the U.S. Federal Trade Commission.

Not only do many victims not report the crime, but many of the crimes go unprosecuted. There were only 564 convictions made for about 800 identity-theft-related fraud cases in 2007, according to the National Institute of Justice's Electronic Crime Program, a part of the U.S. Justice Department.

"The chances of a criminal getting arrested and convicted for identity theft-related fraud are much less than a half of 1 percent," the study said.

More here.


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