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Identity theft tops consumer complaints for 14 years

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The Federal Trade Commission (FTC) released its annual report of consumer complaints today for 2013, and as expected identity theft was the top consumer complaint for the 14th year in a row.

Identity theft made up 290,056 or 14 percent of the more than 2 million complaints that the FTC received in 2013. The second most reported consumer complaint for the third year in a row, was unfair debt collection practices. Debt collection complaints may be related to identity theft because of debt collectors attempting to collect from victims of identity theft.

Although identity theft complaints made to the FTC were significant in 2013, early studies commissioned by the FTC suggest that many more incidences of identity theft go unreported by victims than are reported to the FTC. For example, victim reports to law enforcement, financial institutions, and other organizations may not get reported to the FTC. Annual estimates of identity theft have hovered around 10 million since the FTC began keeping track of identity theft 14 years ago.

Tax-related identity theft and other wage-related fraud was the leading category of identity theft for 2013, making up 30 percent of the total. In the prior reporting year, 2012, tax-related fraud was 43% of the total. On a percentage basis, it appears tax-related identity theft is decreasing.

The next largest category of identity theft for 2013 was credit card fraud, of which there are two types, new account fraud and existing account fraud. Credit card fraud increased from 13.5% in 2012 to almost 17% in 2013. That increase may be attributed to the recent Target and other retailer data breach. However these retailer card breaches occurred so late in 2013, they would not likely contribute to the 2013 credit card fraud statistics.

Because existing credit card numbers were the primary subject of those retailer data breaches, the breaches would have been expected to impact the subcategory of existing account fraud. In 2013, existing account fraud increased about one percentage point compared to 2012; however, new account fraud increased from 8.9% to 11.2% of the total identity theft complaints from 2012 to 2013. Last year we also reported that new account fraud increased compared to 2011. Identity thieves opening new credit cards in victim’s names appears to be an increasing problem.

As in prior years, the 2013 FTC report shows that age group 20-29 are most affected, with 20 percent of all identity theft complaints originating from this younger age group.

For more detailed discussion about whether or not identity theft is decreasing, read the companion article, Identity theft: Top consumer complaint and decreasing?

Not too long ago some experts predicted that the crime of identity would decrease, and the myriad identity theft protection services were a fad. Instead, the crime continues to persist as criminals find creative ways to breach information security systems, violate our right to privacy and take over identities for nefarious purposes. Now many experts are suggesting that consumers should consider some type of comprehensive identity protection.

Author's Note: Another companion article, Identity theft: Recent trends, discusses trends by comparing the last two years of FTC complaint data. Additionally, our analysis of the CY 2013 FTC data includes a separate article on identity theft trends in Wisconsin.

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