ID Fraud Up As Protection Purchases Down
SAN FRANCISCO – Despite a 12.5% increase in the number of U.S. adults who were victims of identify fraud in 2009, there has been a sharp, 42% decrease in the adoption of identify fraud protection services, according to a new Javelin Strategy & Research report.
The report, “2010 Annual Identity Protection Services Scorecard: Market Challenges, Consolidations and the Move Toward ‘Whole Identity,’” found that although consumers who detected fraud using a credit report or credit-monitoring service enjoyed a dramatic decrease in losses for average fraud amounts, fewer Americans are turning to identity fraud protection services due to the down economy and a decline in reported data breaches.
“We believe that providers of identity protection services will achieve the greatest long-term success with consumers when they focus on building customer trust through features and customer service that are most meaningful to consumers in a tough economy,” said Mary Monahan, research director at Javelin Strategy & Research.
Final scores for the individual products were based in part on consumer satisfaction data as reported by the Better Business Bureau.
Among the other findings:
* In 2010, only one in four consumers are using some form of identity protection services.
* Consumers who use credit monitoring services benefit from lower fraud amounts.
* Four in 10 Gen Y consumers are not enrolled in identity fraud protection services. However, those that do prefer to receive their identity fraud protection from their bank, followed by credit bureaus.
* In 2009, 11.1 million U.S. adults became victims of identity fraud, which has resulted in one-year fraud amounts totaling $54 billion. New accounts fraud is the main driver of total fraud increases, accounting for a total growth of $6 billion in losses, increasing 38% since 2007 and 17% since 2008.