By the Numbers:
ID fraud should be a top-five business priority for line-of-business decision-makers at retail institutions. Growth rates are indeed troublesome.
THE FINANCIAL INDUSTRY IS EMERGING from a period of considerable media attention on identity fraud in the U.S. Part of the hoopla was fueled by a lack of realistic data and objective analysis of the number of identity fraud incidents and the dollar losses incurred. While Financial Insights believes ID fraud is not as large a problem as recent reports from government agencies have indicated, the problem warrants significant attention and should be a top-five business priority. Institutions must get started sooner rather than later, as growth rates are very troublesome.
Institutions will absorb most losses.
Financial Insights’ projections for direct fraud loss resulting from ID theft and ID fraud in the retail finance industry in 2003 is about $4.2 billion, doubling to about $9 billion in 2006. The good news for consumers, at least, is that they will be on the hook for only about $200 million of this year’s losses.