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Offline ID crimes still more severe

Online theft comprised just 11.6 percent of known-cause identity fraud in 2004, a report says, half of which was linked to spyware.

Though identity theft using the Internet seems to get all the attention, most of the financial loss linked to fraud is still from offline crime, a new study shows.

Losses related to an average case of Internet-initiated fraud were $551, compared to $4,543 lost from fraud tracked back to paper statements, according to the 2005 Identity Fraud Survey conducted by the Better Business Bureau and Javelin Strategy & Research.

The survey, which follows an earlier study carried out by the Federal Trade Commission in 2003, indicated that Internet-related crimes are actually less severe, less costly and not as widespread as previously thought.

The amount of money lost to

"This new research contradicts some common assumptions about identity-theft fraud and points to new paths of prevention. There are several steps consumers can take to improve their identity safety and protect themselves against this type of fraud," Ken Hunter, CEO of the Council of Better Business Bureaus, said in a statement.

The survey said computer crimes accounted for only 11.6 percent of identity fraud in 2004 in which the cause was known. Half of those crimes stemmed from spyware, software that surreptiously tracks users online or causes ads to pop up when the consumer is online.

"Our numbers show that fears about online identity fraud may be out of proportion to the relative risk, causing consumers to ignore the most glaring issues," James Van Dyke, Javelin's founder, said in a statement. "Indeed, most instances of identity fraud occur through traditional channels and are paper-based, not Internet-based."

Users can protect their financial data by using updated software that protects against spyware and viruses and by and not responding to suspicious e-mail ploys that request personal data. By managing their financial accounts through a password-authenticated Web site, the report added, "consumers can reduce access to personal information on paper bills and statements that may be used to commit identity theft and fraud."

Also revealing was the finding that half of those who committed the online crimes are closely related to the victim as a friend, family member or neighbor.