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Nearly 42 million Americans were victims of identity fraud in 2021, costing consumers $52 billion in total losses, according to a new report cosponsored by AARP. The study, produced by Javelin Strategy & Research, notes that with so many more people relying on the internet due to the pandemic, criminals had plenty of opportunities to harvest their victims’ personally identifiable information (PII). Thieves were especially eager to capitalize on the billions of dollars in stimulus funds that many people received as federal economic impact payments last year.
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These factors and others caused losses through traditional identity fraud to increase by 79 percent over 2020, for a total of $24 billion stolen, according to the study. The number of people affected by traditional identity fraud also increased by an additional 5 million in 2021, for a total of 15 million people. Javelin defines traditional identity fraud as “the unauthorized use of some portion of another’s personal information to achieve illicit financial gain.” Many victims of this type of identity fraud may never find out how or when their personal information was compromised.
The individual cost of identity fraud also grew in 2021, with the average per-victim loss from traditional identity fraud rising by $201, to $1,551. According to the study, victims spent an average of nine hours resolving their identity fraud issues.
“The 2021 losses are staggering and underscore how damaging identity fraud has become,” said Kathy Stokes, director of fraud prevention programs at AARP. “Institutions must show empathy for the financial and emotional toll that identity fraud takes on its victims, who expect — and deserve — to be treated with respect, regardless of their situation.”
Scammers are switching tactics
Another type of fraud the report examines is identity fraud scams. Unlike traditional identity fraud, in which the victims usually don’t know how they became vulnerable, identity fraud scams happen when a crook directly deceives someone into giving away some of their PII, either through phone calls, email, text messages or some other manner. These identity fraud scams decreased in 2021, according to the report. There were 12 million fewer victims of these scams last year, and the amount of money lost to such crimes dropped by $15 billion. But with a total of 27 million victims losing a combined $28 billion, identity fraud scams continue to be an enormous problem.
The average loss per identity fraud scam victim fell from $1,100, in 2020, to $1,029, in 2021. The report attributes the declines in these scams to efforts from “government agencies, such as the Federal Trade Commission, to track and dismantle robocalls, fraudulent emails and SMS text message scams.”