Prevention is the best cure for identity theft

In 2014, 85 percent of people took steps to prevent identity theft, according to ARAG, a provider of legal insurance. Checking credit reports, shredding documents with personal information and changing passwords on financial accounts were top actions taken, according to new data released by the Bureau of Justice Statistics.

It seems actions like these actions are good financial habits to get into. An estimated 17.6 million people, or about 7 percent of U.S. residents age 16 or older, were victims of at least one incident of identity theft in 2014.

In 2014, the most common type of identity theft was the unauthorized misuse or attempted misuse of an existing account—experienced by 16.4 million persons. Victims may have experienced multiple types of identity theft. An estimated 8.6 million victims experienced the fraudulent use of a credit card, 8.1 million experienced the unauthorized or attempted use of existing bank accounts (checking, savings or other) and 1.5 million victims experienced other types of existing account theft, such as misuse or attempted misuse of an existing telephone, online or insurance account.

While a continuing trend, the news is positive:

• The majority of identity theft victims (52 percent) were able to resolve any problems associated with the incident in a day or less, while about 9 percent spent more than a month.
• Most identity theft victims discovered the incident when a financial institution contacted them about suspicious activity (45 percent) or when they noticed fraudulent charges on an account (18 percent).
• Fewer than one in 10 identity theft victims reported the incident to police. The majority (87 percent) of identity theft victims contacted a credit card company or bank to report misuse or attempted misuse of an account or personal information, while 8 percent contacted a credit bureau.

Most attempts at account misuse are quickly and easily resolved, however, once personal information is compromised, it’s important to double down on efforts to watch over your information to ensure it’s not misused again.

“I never had any issues until information of mine was leaked during a data breach in late 2013,” says Jennifer Logan, a victim of identity theft. “Since then, I’ve had at least three incidents where my bank or credit card company has called to let me know my accounts are being misused again. While I haven’t lost money, it’s a hassle to go without the card for a few days — and then go through the process of updating information wherever I may be using a bank card for online payments.”

While most people are fortunate enough to recover quickly, those who spend more time resolving identity theft issues are more likely to experience severe emotional distress and problems with work and personal relationships. Among identity theft victims who spent six months or more resolving financial and credit problems due to the theft, 29 percent experienced severe emotional distress.

Two-thirds of identity theft victims reported a direct financial loss. Victims whose personal information was misused or who had a new account opened in their name experienced greater out-of-pocket financial losses than those who had an existing credit card or bank account compromised. About 14 percent of identity theft victims experienced an out-of-pocket loss of $1 or more. Of those, about half suffered losses of $99 or less and 14 percent lost $1,000 or more.

While anyone can be at risk, the study also showed the most common victim demographic was white, female and making above $75,000 a year.