SAN FRANCISCO, April 10, 2024 (GLOBE NEWSWIRE) -- Today, Javelin Strategy & Research, an Escalent company, published the 21st edition of its landmark Identity Fraud Study, titled “Resolving the Shattered Identity Crisis”. This year’s study found that, after hitting a three-year low in 2022, the average amount of time consumers spent resolving issues stemming from identity fraud skyrocketed in 2023 to nearly 10 hours. Additionally, the average out-of-pocket expenses (legal fees, postage, covering fraudulent debts not reimbursed by a financial institution or merchant) for victims also increased 70% in 2023.
Consumers’ vast digital footprints offer plenty of chances for fraudulent activity to take place. The increasing time needed to resolve identity fraud and the rising out-of-pocket costs for consumers highlight a growing industry need for stronger authentication standards to stop fraud before it happens.
Javelin’s Identity Fraud Study began in 2003 and serves as the nation’s longest-running analysis of identity fraud, with more than 105,000 consumers surveyed over the past 21 years. This study is independently produced by Javelin but made possible with support from the following sponsors: AARP and TransUnion at the platinum level; Intellicheck and PrivacyGuard at the gold level.
There are a few reasons consumers spent significantly more time resolving identity fraud in 2023. Consumers open and maintain multiple accounts, making fraud resolution more complex. Additionally, consumers are taking a much more active role in fraud resolution. Instead of absorbing the costs and cutting their losses (or maybe not even recognizing fraud in their accounts), many consumers feel empowered to pay attention to suspicious activity and act or seek immediate assistance when they believe something to be amiss.
“But consumer empowerment does not rid FIs of any culpability in resolution time increases,” says Suzanne Sando, senior analyst in Javelin's Fraud & Security practice and the author of the report. “There are certainly areas where the fraud resolution process could be drastically improved, especially given the uptick in the average out-of-pocket expenses victims incurred while resolving identity fraud.”
Highlights from this year’s report:
- Combined losses from traditional identity fraud and identity fraud scams remain relatively stable at $42.9 billion: The majority of losses, $23 billion, stem from traditional identity fraud, with the remainder attributed to scams.
- Resolution hours skyrocketed in 2023: Fraud resolution hours rose steeply, jumping to a nearly 10-hour average (compared with 6 hours in 2022).
- Costs in the fraud resolution process increased in 2023: The average out-of-pocket expenses for victims increased 70% in 2023 to $202 (compared with $119 in 2022).
- Financial institutions risk the loss of business after consumers become fraud victims: Consumers were most often inclined to avoid certain merchants and close accounts and move to competitors after experiencing a fraud incident in 2023.
- Strong authentication and identity verification promote effective fraud detection and prevention. This reduces the chances of identity fraud and relieves consumers from the time-consuming burden of fraud resolution.
“Consumers rely on their financial institutions to be trustworthy and highly knowledgeable resources when it comes to resolving identity fraud. FIs can reinforce that trust by ensuring the fraud investigation and resolution process removes as much of the financial and emotional burden from consumers as possible,” Sando adds. “FIs can vastly improve this process by hiring dedicated identity fraud investigators and fraud resolution specialists who are specially trained to investigate and manage the resolution process with compassion and trustworthy expertise.”
Javelin’s Identity Fraud Study is an essential guide to understanding the financial impact and emotional devastation caused by identity fraud in the United States. The online survey of 5,000 U.S. adults is conducted every autumn and publishes the following spring. The study continues to be the standard-bearer in bringing context to identity fraud. For more information or to arrange an interview with the report’s author, contact Marketing Director Sarah Keller.
About Javelin Strategy & Research
Javelin Strategy & Research, part of the Escalent family, helps its clients make informed decisions in a digital financial world. It provides strategic insights to financial institutions including banks, credit unions, brokerages and insurers, as well as payments companies, technology providers, fintechs, and government agencies. Javelin’s independent insights result from a rigorous research process that assesses consumers, businesses, providers, and the transactions ecosystem. It conducts in-depth primary research studies to pinpoint dynamic risks and opportunities in digital banking, payments, fraud & security, lending, and wealth management. Learn more at javelinstrategy.com.
PLATINUM SPONSORS
AARP
TransUnion
TransUnion is a global information and insights company with over 12,000 associates operating in more than 30 countries. We make trust possible by ensuring each person is reliably represented in the marketplace. We do this with a Tru™ picture of each person: an actionable view of consumers, stewarded with care. Through our acquisitions and technology investments we have developed innovative solutions that extend beyond our strong foundation in core credit into areas such as marketing, fraud, risk and advanced analytics. As a result, consumers and businesses can transact with confidence and achieve great things. We call this Information for Good®—and it leads to economic opportunity, great experiences and personal empowerment for millions of people around the world. http://www.transunion.com/business
GOLD SPONSOR
Intellicheck
Intellicheck, Inc. is the industry leading solution for identity validation. With over two decades of experience, our mission is to deliver invisible, seamless customer experiences with 100% decision rates in under a second. We validate over 100 million identities every year in North America.
Intellicheck is used every day and customers are completely unaware!
- 8,000+ bank branches and online
- 30,000+ retail locations and retail websites
- 28 state-level law enforcement agencies
Our mission to deliver the best identity experience your customer never knew they had.
PrivacyGuard
PrivacyGuard gives businesses the power to quickly add an end-to-end managed ID Protection program. PrivacyGuard is a comprehensive identity and privacy protection service that helps consumers to proactively protect their personal and financial information, monitor their credit and receive support if they experience identity theft.
