Despite recent reports showing increases in identity theft, consumers’ knowledge on identity theft is not keeping pace with the crime. According to the new 2013 LifeLock Tax Fraud Survey, conducted online by Harris Interactive on behalf of LifeLock in February, among 2,090 U.S. adults age 18 and older, less than one quarter (24 percent) of taxpayers selected the top 2 points of concern on a 5 point scale about identity theft when filing their returns. Additionally, 70 percent of Americans think it is possible for a fraudster to use their name and Social Security Number (SSN) to file a return before they do, blocking the actual taxpayer’s refund from the IRS. Yet despite this concern, 38% of those who have previous years’ returns saved on their computer do not have password protection for these files. In February 2013 the Federal Trade Commission (FTC) released their annual “ Consumer Sentinel Network Data Book” that looked at consumer complaints from January 1 through December 21, 2012. Identity theft was the number one complaint category in the Consumer Sentinel Network, and of those more than 369,000 complaints, Government Documents and Benefits fraud accounted for 46% of all complaints. As noted by the FTC, identity theft related to Government Documents and Benefits includes Tax or Wage Related Fraud, accounting for 43% of the complaints. “As a company that sees identity theft threats 24/7, we are concerned about the large disconnect between this growing threat and consumer education. This is really playing into the hands of identity thieves,” said LifeLock President Hilary Schneider. The survey examined Americans’ identity fraud concerns and tax return filing behavior for tax season. The 2013 LifeLock Tax Fraud Survey highlights include:
- No Password = No Protection – Nearly three in ten (29 percent) Americans keep copies of previous years’ tax returns on their computer, but 38 percent of this group do not protect their returns with a password. This makes these returns more vulnerable to criminals through peer-to-peer file sharing programs or lost devices.
- College Graduates at Great Risk – Those who are college graduates or have higher education (45 percent) are more likely than those with some college education or less (22 percent) to store copies of previous years’ tax returns on a computer, but 44 percent of this group still did not have the return password-protected.
- North Versus South – Americans in the Southern states (27 percent) are more likely to have selected the top 2 points on a 5 point scale of concern about identity theft when filing compared to their Northeastern counterparts (18 percent).