Consumer Cynicism Climbs in a ‘Runaway Year for Fraudsters,’ a Report Finds

Thanks to the seemingly unending epidemic of data breaches—capped by the huge breach last summer at credit-reporting titan Equifax Inc.—consumers are becoming both more aware and more cynical about the problem, according to research released Tuesday by Javelin Strategy & Research.

In the wake of the Equifax case, in which intruders accessed 146 million records, more consumers reported Social Security numbers having been compromised than reported compromised credit card credentials. That’s the first time that’s happened in the years Javelin has surveyed consumers for its annual consumer-fraud report. The margin was 35% reporting compromised Social Security numbers compared to 30% reporting compromised credit card data. Debit cards were a distant third, at 16%.

The really bad news, as Javelin notes in its report, is that by stealing Social Security numbers fraudsters have built a trove of data that will retain a long shelf life. In fact, criminals have reaped such a harvest of new victims they can’t work fast enough to target them. Almost a third of U.S. consumers were notified of a data breach last year, up from 16% in 2016. “2017 was a runaway year for fraudsters,” said Al Pascual, research director and head of fraud and security at Pleasanton, Calif.-based Javelin, in a statement.

Making matters worse, more consumers have developed a cynical attitude about companies’ post-breach actions. Some 53% in 2017 agreed with the statement that the real purpose of breach notifications is to protect organizations from legal liability, not to help consumers. That’s up from 39% in 2016. Among just breach victims, the percentage shoots up to 64%, compared to 43% in 2016.

The research found that the number of U.S. adult victims of identity fraud—which involves misuse by fraudsters of any consumer credential—reached 16.7 million in 2017, up from 15.4 million in 2016. That number has traced a somber climb from 11.6 million in 2011. The fraud totaled $16.8 billion last year, up from $16.2 billion in 2016 but lower than some prior years, such as 2012, when Javelin calculated a $22.1 billion total.

This latest annual report, entitled “2018 Identity Fraud: Fraud Enters a New Era of Complexity,” is based on an online survey of 5,000 U.S. consumers and was sponsored by Identity Guard, a Chantilly, Va.-based provider of protection services against ID theft.