Study: Millions hit by ID fraud

Identity fraud is a bigger problem than acknowledged, says a new FTC survey, with about 10 million Americans falling victim last year--but the Internet's not the biggest culprit.

Identity fraud is a bigger problem than generally acknowledged, with an estimated 10 million Americans becoming victims in the last year, according to a new Federal Trade Commission survey.

But identity fraudsters appear to be traditionalists. The survey, released Wednesday, found that only a small percentage of identity fraud appeared to involve personal information gleaned from the Internet.

Instead, the details were typically obtained from lost wallets or from acquaintances and family members who knew Social Security numbers and account numbers, according to those respondents who had experienced identity fraud and who knew how their information had leaked out.

Only 13 percent of victims reported that their information was obtained during a transaction such as a credit card purchase--a category that includes shopping in malls and dining in restaurants, too. About half of respondents said they did not know how the identity fraud happened.

Also, 95 percent of identity fraud identified by the survey was a result of someone illicitly using a credit card, a bank account or a telephone service. Only 3 percent of people who reported identity fraud said it involved misuse of their Internet accounts.

"For several years, we have been seeing anecdotal evidence that identity theft is a significant problem that is on the rise," said Howard Beales, director of the FTC's Bureau of Consumer Protection. "Now we know: It is affecting millions of consumers and costing billions of dollars."

The results of the FTC survey are roughly in line with a previous survey conducted by the Gartner Group, which found 3.4 percent of U.S. consumers--about 7 million adults--have been victims of identity fraud of some form in the past year.

Wednesday's survey, conducted by research firm Synovate on behalf of the FTC, comes a day after e-commerce companies including Amazon.com, eBay and Microsoft announced a coalition to combat identity fraud. The coalition aims to work more closely with law enforcement officials in an effort to fight a crime that has emerged as a major concern among politicians and consumers in recent years.

Many of these politicians have cited the Internet as a source of the growing problem of identity fraud.

"Americans' financial privacy--indeed their very financial identities--are at risk as never before," Rep. Jim Leach, the Iowa Republican who chairs the Banking Committee, has said. "Law enforcement agencies need to take these crimes more seriously."

James Huse Jr., the Social Security Administration's inspector general, told a House subcommittee that Social Security information theft, "catalyzed by the Internet, has quickly become a national crisis."

To conduct the survey, Synovate randomly called thousands of U.S. residents. Out of those phone calls, Synovate conducted 4,057 interviews in March and April and compiled the results into a 93-page report.

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