The research firm estimates that 3.4 percent of U.S.
consumers--about 7 million adults--have been victims of identity
theft of some form in the past year. Moreover, arrests in identity
theft cases are extremely rare, catching the perpetrator in only one
out of every 700 cases, said Avivah Litan, vice president of
financial service for Gartner. "The odds are really stacked
against the consumers," she said. "Unfortunately, they are the only
ones with a vested interest in fixing the problem."
The release of the survey comes as state and federal governments
are trying to stem the problem of identity theft. On July 1,
California started requiring companies to report to consumers
any incident that may have compromised their personal data. And new
national legislation, the Fair Credit Reporting Act, would help
protect victims once they determined that their identity had been
stolen.
The Gartner report ups the ante in consumers' battle for
protection. While the U.S. Federal Trade Commission's clearinghouse
for crimes against consumers has received more than 160,000 reports
of identity theft, the real number is much higher, according to the
company.
Gartner interviewed more than 2,400 U.S. adults for the survey in
May 2003 and found that 3.4 percent had been a victim of identity
theft in the past year. If that fraction holds for the entire United
States, then some 7 million adults have had their identity stolen
during that time. The company defines identity theft as a financial
crime in which thieves represent themselves as the victims by
stealing critical private information, such as social security
numbers, driver's license numbers, addresses, credit card numbers or
bank account numbers.
Consumers typically learn of identity theft long after the crime
has been perpetrated. The FTC found that most victims don't know
that their identity has been stolen until more than a year later, on
average.
"It is different from payment fraud, where the thief takes a
credit card number and consumers are innocent until proven guilty,"
Litan said. "With identity theft, it is the opposite: Consumers are
thought to be guilty until proven innocent."
The credit card industry, banks and other financial firms are
mishandling the problem, according to the Gartner report. They don't
recognize fraud as a crime against their consumers, but rather as an
expense of doing business. While credit card fraud is frequently
perpetrated without identity theft, the industry doesn't typically
distinguish between the two. Gartner found that 5.5 percent of the
U.S. adults surveyed, or 11 million nationally, were victims of
credit card fraud.
"There is a serious disconnect between the magnitude of identity
theft that innocent consumers experience and the industry's proper
recognition of the crime," Litan stated in the report. "Without
external pressure from legislators and industry associations,
financial services providers may not have sufficient incentive to
stem the flow of identity theft crimes." |