The probability that you'll lose major money when someone steals your identity is low, but why not take measures to protect yourself?
Think about this the next time you look at a credit card statement or are asked to share your Social Security number with anyone: 16.6 million Americans — 7 percent of everyone 16 and older — were victims of identity theft at least one time last year.
Total losses to ID theft in 2012 amounted to $24.7 billion — “over $10 billion more than the losses attributed to all other property crimes measured in the National Crime Victimization Survey,” says a new report from the federal Bureau of Justice Statistics.
In 2012, 66 percent of the 16.6 million victims of identity theft reported a direct financial loss as a result of the identity theft incident. …
Of those who reported a direct financial loss, victims who experienced the misuse of their personal information reported a mean direct loss of $9,650 and a median direct loss of $1,900. Victims of new account fraud incurred an average loss per incident of $7,135 and a median loss of $600.
Fortunately, only 14 percent of victims were held responsible for any out-of-pocket losses, and about half lost less than $100, the report says. That’s why it’s so important to report fraudulent charges to your bank or credit card company immediately.
The time it took to resolve the issue varied widely:
- Most people spent a day or less fixing the problem. That makes sense, because most people learn they’ve been a victim when they get a call from their bank or credit card company reporting suspicious activity, the report says. No, I didn’t buy a new HDTV at a Walmart store in Florida while I was watching Netflix in my Montana home. The card issuer doesn’t hold me liable. I’ve lost no money and very little time. The issuer sends me a new card.
- 10 percent spent more than a month. It will take more of your time if someone used your stolen information to open new accounts.
- Of those who spent six months or more repairing damage to their finances and credit, 47 percent reported severe emotional distress.
For the purposes of this report, ID theft is defined as “the attempted or successful misuse of an existing account, such as a debit or credit card account, the misuse of personal information to open a new account, or the misuse of personal information for other fraudulent purposes, such as obtaining government benefits or providing false information to police during a crime or traffic stop.”
The report says:
- 15.3 million people experienced the misuse or attempted misuse of an existing account.
- 7.7 million people reported the fraudulent use of a credit card.
- 7.5 million reported the fraudulent use of a bank account, including debit cards.
- 1.1 million reported that a new account was opened with their stolen information.
And get this: “Overall, persons in the highest income category (those with an annual household income of $75,000 or more) had a higher prevalence of identity theft than persons in other income brackets,” the report says.
With this ever-present threat, should you break down and purchase ID theft protection? Actually, you can take steps to protect yourself for free. If you’ve been victimized, you can get a fraud alert placed in your credit files with the big credit-reporting agencies, or you can get a credit freeze, which may or may not cost money.
Money Talks News founder Stacy Johnson explains how to protect your ID for free in the video below.
Have you been the victim of ID theft? Share your experience below or on our Facebook page.