Despite having a number of solutions to prevent identity theft, consumers around the world continue to face this issue every day. In this post, we will look at a few stats to see just how common identity theft is, examine the major reasons why it still exists, and assess how blockchain can play a vital role in the future of identity protection.
How Prevalent Is Identity Theft?
For consumers who haven’t been affected by identity theft, the issue might seem rare. However, looking at a few stats, it is very common. According to 2018 Identity Fraud: Fraud Enters a New Era of Complexity published by Javelin Strategy & Research, in 2017, there were 16.7 million victims of identity fraud.
This marked a record high that followed a previous record the year before. In 2017, the amount of money stolen due to identity theft totalled $16.8 billion.
Common Causes of Identity Theft
Here are a few of the common causes to be aware of in 2018 and beyond.
Easy to Open Accounts with Limited Information
One of the reasons why identity theft is still so common is that identity thieves have been able to change tactics over the years. For example, when more debit/credit card companies starting producing microchip cards in 2015, scammers quickly moved on to other types of crimes like new account fraud.
Because the process of opening new accounts in someone else’s name can be rather easy in a lot of cases, identity thieves are increasingly choosing this option. For example, in the US, identity thieves often only have to have very basic information like name, social, birth date, and address. According to the Javelin study, account takeovers tripled in 2017 from 2016. Losses totalled $5.1 billion.
The good news is that there are a number of ways in which consumers can protect themselves from new account fraud.
Data Breaches Are Increasingly Common
In 2017, 30 percent of U.S. consumers were notified of a data breach, a 12 percent increase from 2016.
One of the reasons why data breaches are potentially even more concerning than other forms of identity theft is that consumers have essentially no ability to prevent this type of cybercrime. This is due to the fact that most companies store sensitive data on centralised databases.
The biggest example seen recently took place in 2017 when the largest U.S. credit bureau, Equifax, suffered a breach that exposed the personal data of 145 million people. Equifax is just one of many data breaches that span back over decades
Anthem (78.8 million accounts), Heartland Payment Systems (134 million accounts), JP Morgan Chase (76 million accounts), and Target (110 million accounts) are just a few of the many examples.
In 2014 McAfee and the Center for Strategic and International Studies (CSIS) estimated annual global losses from cybercrime fall between $375 billion and $575 billion. Unless companies begin to store information using more secure technologies, consumers are likely to continue to face potential identity theft due to data exposure from large-scale hacks.
Consequences of Identity Theft
While becoming an identity theft victim can happen quite easily, getting out of situations where one’s identity has been stolen is typically difficult to do. In some instances, it can take an individual consumer many years to prove to businesses that identity theft has actually occurred.
Part of the reason why this is the case is that banks, mortgage lenders, businesses, and other businesses are weary of people getting out of debt simply by claiming to be an identity theft victim. This makes sense considering that Americans alone hold $12.73 trillion in household debt.
However, for people who truly are victims of identity theft, the process of clearing one’s name can be a nightmare. Not only can a poor credit rating make it difficult to make essential purchases and access financial services it can also affect many other aspects of ordinary life.
For example, as outlined in this story, some identity theft victims have limited access to international travel or face heavy scrutiny from the TSA, border authorities, and other officials.
Blockchain Is the Answer to Identity Protection
As mentioned above, in 2018, most people are still heavily reliant upon centralised databases that tend to be highly prone to hacks. New, more secure technologies like blockchain could very well change the trends in identity theft seen in recent years. Innovative blockchain projects can provide the foundations for the future of data security.
This is exactly what SingleSource aims to do. By utilising a decentralised solution, SingleSource is helping to improve the security of data storage and data sharing for businesses and individual consumers.
SingleSource is also improving the future of financial transparency through the creation of a decentralised risk scoring platform. For businesses, our platform simplifies the process of assessing risk. For individual consumers, SingleSource simplifies the process of tracking personal credit ratings and allows for vast improvements in identity protection.
For more detailed information on how SingleSource works, download the free whitepaper here.