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Despite increased adoption of online shopping, mobile payment and banking apps, offline methods are the top known causes of identity fraud, according to a new study from Travelers (NYSE:
TRV). The first insurance carrier to offer identity fraud insurance reports that even in the digital era, burglary, stolen wallets and pilfered identifications account for 73 percent of all cases, according to a comprehensive study of 2011 Travelers claim data.
Travelers Study Reveals Offline Methods Are Top Causes for Identity Fraud Claims - 73% of identity fraud cases resulted from stolen personal item (Graphic: Travelers)
Stolen or misplaced items, such as wallets and pocketbooks, accounted for the most common known causes for identity fraud. In the number two spot was a stolen or compromised license, Social Security card or other form of personal identification, according to the company’s 2011 claim data. Burglaries rated third, followed by cyber breaches (including Internet scams) and old-fashioned forgeries.
Since identity thieves acquire valuable personal information in less obvious ways—from sorting through trash for bank statements to stealing pre-approved credit card applications in the mail—only 10 percent of survey respondents could identify whom the perpetrator was who committed identity fraud against them.
“When everyday essentials, like wallets or drivers licenses, are stolen or go missing, identity fraud often follows,” said Joe Reynolds, Identity Fraud Product Manager at Travelers. “Credit cards, drivers licenses and other sources of personal information enable criminals to commit a fraud or crime, all in your name.”
Travelers found the following as the top known causes of identity fraud:
73 percent - burglary and theft of wallet/purse/personal identification/computer
15 percent - online or data breach
10 percent - forgery
2 percent - change of address/postal fraud
“People are not always aware that someone is illegally using their identity until suspicious activity appears on their monthly financial statement,” said Reynolds. “It is critical that consumers closely review these monthly documents, and remember to immediately call the bank if they suspect fraudulent activity.”