The Cost of Identity Theft

Posted by Petr Pinkas May.30, 2013 in Passwords & Security

Consumers who fail to practice effective online security may quickly find themselves victims of identity theft. Passwords are one of the first and most important safeguards for keeping sensitive data safe from malicious criminals. However, many use identical credentials for all of their accounts or fail to ever update these phrases, making them a prime target for identity fraud.

Identity theft costs consumers a lot in the long run

Identity theft costs consumers a lot in the long run

USA Today reported that a majority of security breach victims have to replace their credit and debit cards, but identity theft incidents are much more costly beyond that process. The news source explained that people may spend years trying to restore bad credit from debt at the hands of thieves. Some consumers are forced into bankruptcy, struggle to borrow money or even lose their homes because of such malicious activity.

In addition to seeking passwords to take advantage of unsuspecting consumers, cybersecurity expert Mark Pribish said that identity thieves are also looking for ways to obtain user names, PIN numbers, Social Security numbers, banking data, insurance information, driver’s licenses, phone numbers and employment/student IDs, USA Today reported.

People who often access accounts online are vulnerable to identity theft because vendors fail to shore up weak points with their security measures. Mark Rasch (@mdrasch‎), a former federal cybercrime prosecutor and cybersecurity expert, said many businesses are content with reaching a settlement following security breaches rather than spending money to fix the problems with their systems, according to the news source. Law enforcement is not helping the matter, Rasch said.

“Police don’t want to be bothered,” Rasch said, USA Today reported. “It’s a difficult crime to investigate, and the feeling is, ‘Oh, we’re never going to catch these guys.’”

Identity theft becoming bigger problem for Americans

If 2013 follows a similar trend to 2012, Americans will experience the brunt of identity theft activity. A report by Javelin Strategy & Research found that 12.6 million Americans were identity fraud victims in 2012, increasing by more than 1 million from previous studies. Criminals cost people more than $21 billion last year, marking the highest total since 2009.

Jim Van Dyke, CEO of Javelin, said 2012 was a successful year for criminals and a difficult one for consumers.

“Consumers and institutions are now starting to act as partners – detecting and stopping fraud faster than ever before,” Van Dyke said. “But fraudsters are acting quicker than ever before and victimizing more consumers. Consumers must take data breach notifications more seriously and maintain vigilance to safeguard personal information, especially Social Security numbers.”

The study said that credit card information is the most popular type of data obtained by fraudsters, but other credentials are vulnerable as well. User names, passwords and Social Security numbers are other targets.

Passwords are often the first line of defense, yet most overlooked. Consumers who want to avoid the dangers and financial losses of identity theft should strongly consider ways to bolster their online security. Our password manager Sticky Password is a great way to generate complex credentials without the hassle of remembering such phrases. The tool is available for free, or a PRO version can be purchased to keep all of a person’s accounts safe from malicious criminals.

People can take other preventive measures to minimize their risk of experiencing identity theft. Javelin encouraged people to avoid mailing checks to pay bills, always have updated software on PCs and mobile devices, shred documents that contain sensitive information, employ direct deposit options for payroll checks and only connect to trusted WiFi locations. 

Do you know how secure are you online? Check it out in our infographic. And of course, lets discuss this topic under the post in comments.