Consumers' increased vigilance is helping banks curb identity theft, even though individuals often look for the problem in the wrong places, experts say.
Though data breaches at banks and retailers are constantly in the spotlight, such cases represent only 6.96% of the cases in a study published last week by the Identity Theft Assistance Center, which is funded by the Financial Services Roundtable to provide assistance to identity theft victims referred to it by their banks.
Anne Wallace, the center's executive director, said that the heightened awareness among consumers is an important factor in curbing identity theft.
"People sometimes are able to trace it back. We've had some victims who are just sleuths. They're not happy not knowing" the person responsible for their problems, she said.
The center found that the most common cause of identity theft — appearing in 22.61% of the 275 identity theft cases it handled in an unspecified recent month — is friends, relatives, and employees who work in the victim's home.
"I'll never forget this one young man whose mother was the one opening accounts in his name," she said.
The center also found that 10.43% of the cases it handled were caused by corrupt businesses and employees, a very difficult cause to nail down, Ms. Wallace said. "It could be the receptionist in the doctor's office."
Even though the cases can be emotionally difficult, many victims see the process to its eventual conclusion, she said. "You have to be prepared to agree to prosecute. We've had very few people refuse to do that, because our sense is that people want justice."
Such efforts could help explain a surprising drop in the number of identity theft cases and the amount of money lost.
Javelin Strategy and Research reported last week that fraud losses fell 11.5% last year, to $49.3 billion, while the number of victims decreased 5.6%, to 8.4 million.
"We've finally turned the tide on ID theft," said James Van Dyke, the president of the Pleasanton, Calif., research company.
One reason for the reduction is that since both banks and consumers are victims, fraudsters have to get past the vigilance of both for the crime to succeed, Mr. Van Dyke said.
Consumers are more aware of how their personal information can be misused, but banks also are more resistant to opening accounts for people with little documentation of their identities, he said.
"There's a lot more attention" to the problem, "but it's not just attention," he said. "It's also expertise."
The decline is no fluke, Mr. Van Dyke said. "I believe that we will see, overall, identity fraud continuing to drop. I believe that we won't lose the ground we've gained in new-account identity fraud," at least not for the next several years.
Some definitions of identity theft restrict it to opening accounts fraudulently, whereas others include fraud on existing accounts. The Javelin study used the broader definition, but Mr. Van Dyke said he also found that "new account fraud dropped very, very sharply."
People ages 18 to 24 are most likely to be identity theft victims, in large part because their lifestyle puts them more at risk, he said. "They are victimized by people close to them at a higher rate," because they have more close relationships with people they may not be able to trust, such as college roommates.
Susan Menke, the senior financial services editor for Mintel International Group Ltd. of Chicago, said that a survey she published last week found that consumer perceptions about identity theft are "almost directly inverse to the reality."
In the survey of 2,000 U.S. adults, conducted in August, 78% of respondents said they believed that identity theft is on the rise, and 12% said it was staying the same. Just 2% said it was on the decline. (The rest said they did not know.)
Whereas data breaches are a much less prevalent cause of fraud than being victimized by someone they know, consumers overwhelmingly expressed concern about giving their financial information to merchants, especially online, Ms. Menke said.
In the survey, 68% of respondents said they were "very concerned" or "somewhat concerned" that they would fall victim if they shopped online, she said.
"The vast majority of incidents happen through Dumpster-diving or a family member stealing a credit card," Ms. Menke said.
When asked to pick the likeliest place for their card information to be stolen, 31% of respondents said the Internet, making it the top fear. Only 28% picked the mail, even though that is actually a greater risk than the Internet, she said.
