FTC: ID theft complaints drop, credit woes grow

For the first time since the Federal Trade Commission started counting 10 years ago, the number of Americans reporting identity theft dropped in 2009, the agency said Thursday.  The drop was significant – about 10 percent – but doesn’t necessarily indicate the crime is disappearing.  The 278,078 reports taken last year still represent more than any year prior to 2008. 

Meanwhile, reports of other kinds of fraud to the agency skyrocketed by 24 percent, with consumers telling the FTC they had lost $1.7 billion in those frauds.  The median lost per complaint was $399.

Tops among this “other fraud” category were debt collection firms.  Nearly 10 percent of all complaints taken by the FTC involved debt collection, totaling nearly 120,000.  Debt collection complaints jumped by 11 percent from last year.

Other credit-related complaints also jumped, including complaints about credit cards, which more than tripled from last year.  Complaints labeled “banks and lenders” were up by nearly 50 percent.

The results can be found in the FTCs annual report of top complaints to its Consumer Sentinel database, which was released Wednesday morning. John Krebs, director of the Sentinel database, said the jump in complaints about financial companies should come as no surprise.

“These do seem to be in line with what we’ve seen given the state of the economy,” he said.

Krebs cautioned against viewing the drop in ID theft reports as a trend, because the complaints represent only self-reported information from consumers.  Still, multi-year drops in reports of a particular type of ID theft involving credit card fraud provide a reason for optimism, he said.

“Hopefully some of that represents increased awareness by consumers and increased vigilance by industry,” he said.

Once again, most consumers reported their first contact with fraudsters generally arrived via the Internet – 48 percent said e-mail, while another 12 percent said a Web site. Only 10 percent of complainers said their incident began with a phone call, perhaps an indication of the success of the Do Not Call list, Krebs said.

Other notable observations from the FTC data: Nevada is the state with the highest per capita rate of reported “other” fraud, followed by Colorado and New Hampshire.  Florida is the state with the highest per capita rate of reported identity theft complaints, followed by Arizona and Texas.

Credit card fraud (17 percent) was the most common form of reported identity theft, followed by government documents/benefits fraud (16 percent), phone or utilities fraud (15 percent), and employment fraud (13 percent). Other significant categories of identity theft reported by victims were bank fraud (10 percent) and loan fraud (4 percent).

Krebs said it’s hard to draw definitive conclusions from the raw data that the agency releases every year, other than to serve as warning to consumers that fraud is alive and well.

“Clearly whether the number goes up or down, ID theft and fraud are still major issues,” he said. “The key message is it’s still out there, and with each new situation that arises in the economy fraudsters try to take advantage of it.”

Krebs urged consumers to maintain a healthy skepticism and to take advantage of educational materials available on the FTC’s Web site, including a new video with tips on avoiding fraud and filing complaints.

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