Identity Fraud Cost Americans $43 Billion in 2023

The report warns that social media has become fertile ground for scammers as well.

And while older people are less likely to become scam victims, they lose more money to scams than their younger counterparts: an average of $803 for victims in their 70s compared to $460 for those in their 30s, based on reports to the Federal Trade Commission .

There’s also more straightforward identity theft — unauthorized access to personal information — which can occur without a scam or identity fraud. It’s commonly carried out through large-scale data breaches of online platforms, where cybercriminals hack into company’s systems and steal sensitive consumer data. Sometimes they will encrypt the captured data and request a ransom for its unencryption and release.

The Identity Theft Resource Center found that the number of data compromises soared last year to 3,205, compared to 1,801 in 2022. They are most frequently due to cyberattacks like the one experienced by Change Healthcare earlier this year (where a ransomware attack threatened to compromise sensitive healthcare data of UnitedHealth Group patients), as well as AT&T’s recent announcement that 73 million current and former customers’ personal information (including Social Security numbers) had been discovered on the dark web. 

Identity theft can lead to identity fraud when criminals take that stolen information and put it to malicious use.  

Victims’ perspective

Experiencing identity fraud can be devastating, says James E. Lee, chief operating officer of the Identity Theft Resource Center. He notes that the organization has seen a dramatic increase in the percentage of fraud victims they speak with — some of whom have lost hundreds of thousands of dollars — who say they’ve contemplated suicide because of the crime. Twenty-five years ago, two or three percent said they’d considered it, according to Lee, but in 2023, 16 percent of identity fraud victims said they’d thought about ending their lives.

Victims have to go through what’s often an arduous process to secure their accounts. The Javelin survey found that resolving a case of identity fraud is now more difficult — or at least more time-consuming — than ever. Researchers found that consumers spent an average of 10 hours resolving identity fraud, up from just six hours in 2022.

“That’s a massive increase,” says Sando. “ I think it goes back to the fact that we have so many accounts. That certainly plays into this increase in resolution time.”​  

In addition to the losses victims experience directly from the identity theft, the report found it costs them an average of $202 out of pocket during the fraud resolution process. That includes “legal fees, postage or covering fraudulent debts not reimbursed by a financial institution or a merchant, etc.”

How to protect yourself from identity fraud

You can’t prevent a data breach at a big company that holds your information, notes Lee, “but what we can do is make that [stolen] information less useful.” 

Key steps:

Be more aware of what information you’re sharing and where you’re sharing it. Ask: How do you protect my personal information? Why do you need this information? “It’s an automatic reflex,” says Lee, referring to our instincts to provide our phone number or address when filling out forms, for instance. “Don’t be afraid to say no,” he adds.

Freeze your credit. This restricts access to your credit history and makes it harder for identity thieves to open new accounts in your name. (This story explains when and how to freeze your credit.)

Use different passwords for every account. “[Criminals] know that most people use the same password on all their accounts,” Lee notes. A password manager can help you keep track of them all.

 Use multifactor identification: “Make sure you’re not solely relying on passwords” for financial accounts, says Sando. Many financial institutions will allow you to also use facial recognition or a one-time passcode sent to your phone, as an extra layer of security.

Find support

​AARP Fraud Watch Network has a toll-free helpline (877-908-3360), where trained volunteers provide fraud victims and family members support and guidance on what to do next.

The VOA ReST (Resilience, Strength and Time) program, a collaboration between AARP and Volunteers of America, offers free online facilitated emotional support sessions for fraud victims. You can attend as many sessions as you’d like; just register in advance online.​