Is Social Media to Blame for a 13 Percent Increase in Identity Fraud in 2011?

Identity fraud jumped by 13 percent in 2011, and that increase may be the result of consumers' social media and mobile behaviors.

For the past nine years, Javelin Strategy & Research has conducted an annual analysis of identity fraud trends, and for the first time, the 2011 study examined social media and mobile phone behaviors, ultimately uncovering certain related consumer practices that appear to increase risks.

Here are some of the key findings in more detail:


The overall number of identity fraud cases is up, but the dollar amount held steady. Javelin found that more than 11.6 million adults became a victim of identity fraud in the US last year, although the dollar amount stolen remained constant. (Javelin defines "identity fraud" as the unauthorized use of another person's personal information to achieve illicit financial gain.)

Social behaviors are risky. LinkedIn, Google+, Twitter and Facebook users had the highest incidence of fraud although there is no proof of direct causation. What's the risk? Javelin found that consumers share significant amounts of personal information frequently used to authenticate identity. For example:
68 percent of people with public social media profiles shared their birthday information (with 45 percent sharing month, date and year),


63 percent shared their high school name,

18 percent shared their phone number, and
12 percent shared their pet's name.

Smartphone owners experience greater incidence of fraud.The data revealed that 7 percent of smartphone owners were victims of identity fraud that's a one-third higher incidence rate compared to the general public. Javelin said part of this increase may be attributable to consumer behavior:
32 percent of smartphone owners do not update to a new operating system when it becomes available,
62 percent do not use a password on their home screenenabling anyone to access their information if the phone is lost, and
32 percent save login information on their device.


Data Breaches are increasing, and they're more damaging.One likely contributing factor to the fraud increase was the 67 percent increase in the number of Americans impacted by data breaches compared to 2010. Javelin Strategy & Research found victims of data breaches are 9.5 times more likely to be a victim of identity fraud than consumers who did not receive such a data breach letter.

"While identity fraud incidence increased last year, it is becoming less profitable for fraudsters. Consumers, the financial services industry, law enforcement and government agencies are stopping fraud earlier and making new account fraud more difficult to perpetrate," said James Van Dyke, president and founder of Javelin Strategy & Research. "The study found specific opportunities for improvement. Consumers must be vigilant and in control of their personal data as they adopt new mobile and social technologies in order to not make it easier for fraudsters to perpetrate crimes. Our survey found data breaches are increasingly putting consumers at risk. Consumers and organizations should always carefully and actively monitor accounts, but they should pay particular attention after an incident."

For tips to help protect yourself and your business from data breaches and identity theft see this press release from Javelin Strategy & Research.