Identity fraud increased substantially in 2008, reversing a four-year trend of decreasing incidents. Researchers say identity fraud increased by 22% last year and they anticipate another 22% jump in 2009, attributing the increases to crimes of opportunity driven by the economic downturn. What’s more, despite recent headlines and growing fears about online security and data breaches, old-fashioned theft is the most popular way thieves steal identities and perpetrate identity fraud.
According to 2008 claim data compiled by Travelers, burglary and theft of wallets, purses, and personal computers provide thieves the best opportunity to gain access to personal information. In instances where the victim knew their identity had been stolen, it was the result of personal property being stolen nearly 78% of the time. Travelers identifies the following as the top known causes of identity fraud:
- 78%—burglary and theft of wallet/purse/personal identification/computer
- 14%—online or data breach
- 5%—change of address/postal fraud
- 3%—lost credit card and other miscellaneous causes
More than 75% of the time, criminals use stolen information to open new credit card accounts or use the existing credit cards to make charges. Twenty percent of identity thieves will withdraw money from existing checking, savings, and online accounts and 16% open utility accounts in the victim’s name.
Steps you can take to protect your identity include guarding Social Security numbers and financial information and shredding documents such as receipts, credit/insurance applications, and bank statements.
Travelers Identity Fraud Expense Coverage is available as an endorsement on their homeowner’s policy for $25 annually and offers protection up to $25,000 with no deductible. Check with the companies you represent to see what coverage is available. This coverage is a great opportunity to educate your clients and offer them broader coverage for a small premium.
