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Electronic Transaction Use & Risk of Identity Theft

This informative article addresses the reasons why consumers hesitate to access their bank accounts online, discussing fraud, identity theft risks, prevention measures, and the vital role of consumer education in mitigating such risks. Data sources, statistics, and practical tips are provided to empower consumers to make informed decisions. Learn how online activities like statement viewing and bill payment can boost security and reduce the risk of identity theft.

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Electronic Transaction Use & Risk of Identity Theft

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  1. Electronic Transaction Use & Risk of Identity Theft

  2. Why Consumers Don’t Access Bank Accounts Online Earlier you indicated that you do not access your bank accounts online. Which of the following describes why you have not done so? Percentage of Those Who Do Not Access Account Online Source: Javelin Strategy & Research (5/03), n = 2,877 (those who do not access account online)

  3. The Reality • There IS a lot of fraud on the Internet • Fraudsters and Security experts have been playing cat-and-mouse for years • Fraudsters and Prevention experts must constantly out-innovate one other • Government and industry-coalition actions are ineffective. Who will lead? Who can you trust? • Consumers are unable to determine which actions will decrease their personal risk. Therefore, despite benefits and incentives, they resist change.

  4. Identity Theft Costs • Average to businesses: $4,800 • Average to individuals: $500 (out of pocket) • Average time to individuals: 30 hours per case • With any serious personal injury, time spent worrying greatly outweighs time spent in affliction or recovery. • Example: lightning strikes and shark bites affect few, but the fear is nearly universal Data Source: FTC Identity Theft Survey Report, 9/03

  5. New Account Fraud: Less Prevalent, More Costly Source: FTC Identity Theft Survey Report, 9/03

  6. New Accounts Opened by Identity Thieves Percentage of New Accounts Opened by Identity Thieves 4E Source: FTC Identity Theft Survey Report, 9/03

  7. Existing Account Fraud: More Prevalent, Less Costly Source: FTC Identity Theft Survey Report, 9/03

  8. How Victims Discovered ID Theft Detection Is Greatly Improved Here -Javelin Despite sophisticated fraud detection systems, most identity theft is discovered by the victim, when theyview an mailed paper statement! Source: FTC Identity Theft Survey Report, 9/03

  9. Education is Needed • FACT-based consumer awareness: • Fraud occurs in every channel • Paper should not be equated with safety • Just because fraud occurs online, doesn’t mean it was caused online • Even offline consumers can be a victim of “online” fraud • Much online fraud starts (or is prevented) offline. • Consumer tips should include online recommendations • Online statement viewing, bill payment, and banking can reduce overall risk of identity fraud by over 10% • Current available US economic benefit is $4.86B • With greater industry participation, this figure will rise

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