Consumers' social media and mobile behavior may be putting them at greater risk for identity theft, according to the 2012 Identity Fraud Report. The report, now in its ninth year, presents Javelin Strategy and Research's independent analysis of identity fraud trends and is sponsored by Fiserv, Intersections and Wells Fargo.
This year's report reveals that identity fraud in the U.S. increased by 13 percent in 2011, with more than 11.6 million adults becoming fraud victims. Of those victims, people who use the social media sites LinkedIn, Google+, Twitter and Facebook are experiencing higher incidences of fraud, although there's no proof of direct causation, according to the report.
Inappropriate sharing of information via social media could be contributing to an increase in fraud, according to Jim Van Dyke, founder and president of Javelin. "People are putting a lot of information out there without thinking about it," he says. "Nobody's going to say, 'bail out of social media,' but people need to be careful about what they're putting out there and how it correlates to what they give to banks."
In addition to social media users, smartphone owners are seeing a higher rate of fraud than the general public. This fraud increase could possibly be connected to risky behavior on the consumer's part, according to the report, which reveals that 32 percent of smartphone owners do not update to a new operating system when it becomes available; 62 percent of them do not use a password on their home screen; and 32 percent of them save login information on their device.
"The risk also comes with third-party apps that are being downloaded and what access those apps have to the phone and other apps," explains Steve Schwartz, EVP of consumer services at identity risk management services provider Intersections. "Many apps ask for and seek pretty broad liberties with your account. Those sorts of things should raise a huge red flag. Customers are not taking the right precautions."
Education becomes vital as the adoption of new technology continues to accelerate, says Van Dyke. Although banks can help educate consumers on safe behavior, consumers are ultimately the ones responsible for protecting themselves from identity theft, say Schwartz and Van Dyke. "Banks can only see part of a customer's financial life," explains Schwartz, adding that a more holistic view is needed for full protection. The report says consumers can achieve this holistic view of their financial life by enrolling in services such as credit monitoring. It also recommends consumers pay bills online via a secure internet connection and use direct deposit instead of dealing in paper checks.
A video summarizing all of the main findings of the report, as well as other recommendations for fighting identity fraud, is below.