FTC’s 2008 Crime Complaint Data Unveiled

Looking for something meaty to sink your teeth into during National Consumer Protection Week? You may consider check out Federal Trade Commission’s newly released consumer complaint figures. Like years past, identity theft tops the list, at 313,982 complaints filed with the agency. Of course, registered grievances don’t translate to all identity theft instances, so the numbers inherently under-represent the problem’s scope—vastly.  As John Krebs, program manager for the FTC’s Consumer Sentinel Network database tells the Boston Herald, an agency survey revealed that an estimated 4 percent of all identity theft victims file complaints. To quote the paper, the FTC numbers are just “the tip of the iceberg.”

If the tip reveals anything about the iceberg’s total composition, credit card fraud (20%) is the most common form of identity-related fraud, followed by government documents/benefits fraud (15%), employment fraud (15%), and phone or utilities fraud (13%).  Bank fraud (11%) and loan fraud (4%) round out other significant categories of identity-related crimes.

Other highlights from the report’s executive summary include:  
 
•  Government documents/benefits fraud is now the second most common reported type of identity theft after credit card fraud.  Fraudulent tax return-related identity theft, a subtype of government documents/benefits fraud, has increased nearly six percentage points since calendar year 2006.  
 
•  Electronic funds transfer-related identity theft continues to be the most frequently reported type of identity theft bank fraud during calendar year 2008, despite declining since calendar year 2006.  
 
•  Arizona is the state with the highest per capita rate of reported identity theft complaints, followed by California and Florida. 

And then there was this striking finding: About 65 percent of those who registered complaints with the FTC failed to report their identity theft to police. About 27 percent told police and filed a report, while 6 percent told police, but had no formal report taken.

Police reports are important, not only for victims who might need them to resolve cases with creditors and financial institutions, but also for purposes of record-keeping. The more documentation we have of identity-related crimes, the better. How big is the identity theft problem? The most recent Javelin Strategy & Research survey puts the number of victims at 9.9 million. FTC survey data placed the number of victims at 8.3 million—back in 2005. Given the trend in research findings, it’s reasonable to believe the crime has only gotten worse. 

The FTC data reveals an inverse correlation between adults’ age and rates of victimhood.  As PCMag.com points out: “At 24 percent, those between 20 and 29 were the most common age group to be hit by ID theft. Those aged 30 to 39 were close behind with 23 percent, while people in their 40s represented about 19 percent. About 7 percent were under 19 and 5 percent were over 70.”

One can speculate reasons for this data distribution—young people are less likely to shred sensitive documents, including instant credit applications with which they’re frequently bombarded, and they’re more active online, increasing the possibilities of social engineering attacks, malware, WiFi hacking, fallout from stolen laptop computers and more. Perhaps rates of identity theft among the elderly are higher than statistics imply, as their cases are less likely to go reported. 

The takeaway? Identity theft is a huge and multi-faceted problem affecting all age groups—one that consumers, businesses and government should take seriously. For consumers and businesses, that means safeguarding personal data in the real and online world (and promptly notifying relevant authorities when that data is compromised).  For government, that means holding organizations accountable when they fail to keep their end of the data security bargain. Equally important, it means promoting newer and better research methodologies.