Commentary

Social Media Increases Risk of ID Theft

It probably doesn’t come as much of a surprise, but a new study from Javelin Strategy & Research confirms that social media puts users at increased risk of identity theft, which Javelin finds is increasing -- at least in the number of people affected.

A total of 11.6 million U.S. adults were victims of identity fraud in 2011, up 13% from 10.2 million in 2010, according to Javelin, which conducted an address-based survey of 5,022 U.S. adults in October 2011; Javelin also draws on identity fraud data from Fiserv, Intersections Inc. and Wells Fargo & Company.

The 2011 figure reverses a 28% decline in the number of victims of ID fraud from 2009-2010. Meanwhile, the amount of money stolen remained even at around $37 billion per year in 2010 and 2011. Indeed, the long-term trend line is positive, at least in terms of the amount stolen: the dollar volume of identity fraud is down by almost half from its peak of $70 billion in 2004.  

The good news is that the sums stolen (through all manner of identity fraud) are decreasing -- but the risk of ID fraud posed by social media specifically appears to be increasing.

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Javelin said it identified certain social and mobile behaviors that had higher incidence rates of fraud than for average consumers. On this note, LinkedIn, Google+, Twitter and Facebook users were found to have the highest incidence of fraud, although Javelin emphasized there is no proof of direct causation. Nonetheless, it seems likely that there is a causal connection, considering that the information shared by many social media users is exactly what fraudsters are looking for.

Thus Javelin found that 68% of people with public social media profiles shared their birthday information, with 45% sharing the month, date and year. 63% shared the name of their high school. Meanwhile 18% shared their phone number, and 12% shared their pet's name -- all of which Javelin says are popular categories of personal information used by companies to verify identity.

Interestingly, Javelin also found that smartphone owners also experience a higher incidence of fraud -- with 7% experiencing ID fraud, about one-third higher than the general public. And social media users who check in with GPS-enabled devices reported fraud rates that were about twice the average.

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