Many readers were stunned last month when the August Experian/Gallup Personal Credit Index (PCI) poll showed nearly one in five Americans say they've experienced identity theft. As a result, we decided to dig deeper into the issue of identity theft in the September PCI poll*. The results provide some added insight into how consumers think about the problem.
Theft of Financial and Personal Information
One in six Americans say they have had financial information -- such as their bank or credit card numbers -- stolen. This is similar to the 18% in last month's poll who said they had experienced such a theft.
Six in 10 (62%) of those who had their information stolen say someone charged purchases against a credit card they already had. Fifty-four percent said someone charged purchases or withdrew money from their bank account.
Twelve percent of U.S. consumers say they have had personal information -- such as their driver's license, birth certificate, or Social Security number -- stolen. Of those who have had such an experience, 1 in 11 (9%) say someone opened a new bank account in their name and about 1 in 7 (15%) say someone obtained a new credit card in their name.
Action Taken to Prevent Identity Theft
Gallup asked consumers about a list of actions to prevent identity theft. Eight in 10 (81%) say they shred their financial documents or credit card offers before throwing them away -- this probably includes simply tearing up such items. About half (52%) of consumers check their personal credit reports on a regular basis and nearly that many (46%) say they pay for anti-hacking software to protect their computer privacy. About one in five (19%) have purchased a product that tracks any changes in their credit reports, while one in nine (11%) have purchased identity theft insurance.
The survey also provided a list of possible reasons why some consumers are doing little to protect themselves against identity theft and asked respondents whether they agree with each reason. Three in four consumers (74%) agree that they would take more steps to avoid being a victim of identity theft if they knew what to do. Four in 10 (43%) people think it is unlikely they will be victims of identity theft. One in three people (33%)think there is nothing they can really do to prevent identity theft, and 10% say their credit is so bad that it doesn't matter if someone steals their identity.
True Victims of Identity Theft
Three in four consumers (77%) say they consider credit-card fraud -- someone stealing their credit card and making purchases with it -- to be identity theft, which is one reason why the percentage of people who report identity theft seems so high. In other cases, identity theft takes place, but the consumer is not directly affected.
The real severity of the identity theft epidemic depends on how one defines what "identity theft" really means. Overall, about 13% of consumers have experienced some monetary loss from having their personal or financial information stolen. This includes 11% who might be classified as victims of financial fraud and only 2% who have actually had a false credit card or bank account set up in their name -- the technical definition of identity theft.
Bottom Line
Regardless of whether one refers to the theft of personal and financial information as identity theft or financial fraud, the destruction wrought by Hurricane Katrina has created a target-rich environment for such transgressions. The loss of individual financial records and the need to replace them quickly could lead to a significant increase in identity theft and financial fraud during the months ahead, adding further stress to residents already suffering in many other ways.
*Results for the survey are based on telephone interviews with 1,011 adults, aged 18 and older, conducted Aug. 15-21, 2005. For results based on this sample, one can say with 95% confidence that the margin of sampling error is ±3 percentage points.
