New Account Credit Card Fraud Up 24% In 2018

Borrowing, Credit Cards, Personal Loans & Lines of Credit

Welcome to the 2018 Consumer Fraud Awards Show! We have a great show for you, with criminal activity galore. Tonight’s winners are chosen based on information from the Consumer Sentinel Network 2018 Data Book and brought to you by the Consumer Information Group at your Federal Trade Commission (FTC).

Okay, there really isn’t a consumer fraud awards show – but it has been a banner year for fraud and identity theft reports. After a three-year decline from a peak of 1.526 million fraud reports in 2014 to 1.29 million in 2017, 2018 fraud reports shot up to 1.427 million.

Similarly, identity theft reports peaked in 2015 at just over 490,000, sank for two consecutive years, and rose to over 444,000 in 2018. The number of combined annual fraud and identity theft reports is at a record high. One–quarter of those reporting fraud lost money in the process, resulting in a median loss of $375 and $1.48 billion in total losses.

The three top consumer reports of 2019 were imposter scams (18% of all reports), debt collection issues (16%), and identity theft (15%). There’s little challenge to the top three, as no other category reached 6% of total reports.

Imposter scams involve someone pretending to be a trusted person to get you to send money or give out your personal information. These situations include romance scams and fraudsters claiming to be relatives in distress, technical support experts, government representatives, or well-known businesspeople in order to get your money.

Debt collection issues refer to creditors or third-party debt collectors who call repeatedly or continuously, use profanity, fail to send written notices of the debt, falsely represent the status or amount of the debt, falsely threaten legal action, or otherwise violate the Fair Debt Collection Practices Act.

The data book defines identity theft as someone appropriating your personal identification information, such as your Social Security Number or credit card account number, to commit theft or fraud. The most common types of identity theft reported include credit card fraud, bank fraud, phone or utilities fraud, employment or tax-related fraud, loan or lease fraud, and government documents or benefits fraud.

While debt collection reports fell by 24% to move to second place, both imposter scams and identity theft are still going strong. Almost 20% of people lost money in imposter scams, with a median loss of $500 and $488 million in total losses. Identity theft losses are shifting in focus, with tax fraud losses dropping by 38% while fraudulent new credit card accounts increased by 24%. Let MoneyTips protect your credit and your identity with a free trial.

FTC data revealed an interesting relationship between fraud reporting and age. Younger people report losing money more often to fraudulent schemes compared to older people. Approximately 43% of Americans 20-29 years old reported fraud losses, compared to only 15% of Americans 70-79 years old.

However, when they did lose money to fraud, older Americans lost more on average. The 20-29 age group reported a median of $400 in losses, while the 70-79 age group reported a median loss of $751 – and those aged eighty and above had a whopping $1,700 median loss to fraud.

Older Americans may have seen scams before and be more skeptical than their younger counterparts – or it could be that older Americans are less likely to report the losses unless the losses are too large to ignore. They may be ashamed to admit they were victims of fraud, thinking that they should have known better.

If you’re a victim of fraud and/or identity theft, be sure to report what happened to the FTC and local law enforcement. Don’t be embarrassed. As the statistics show, you aren’t alone – and your report may help catch fraudsters and prevent further damage.

Whether or not you’ve been a fraud victim in the past, avoid becoming one in 2019.

Take common-sense steps to protect your personal information, both in electronic and hard copy form. Learn to recognize common e-mail/telephone scams and be skeptical of any unsolicited requests for personal information.

Fight the increase in fraudulent credit card accounts by applying credit freezes to your accounts to keep identity thieves from opening new accounts in your name. Check your credit report regularly. Consider using a credit monitoring service if you’re too busy to monitor all of your accounts. You can start monitoring your credit and see your credit report and score for free within minutes by joining MoneyTips.

There probably won’t be a 2019 Consumer Fraud Awards Show. If there is one, don’t have a reason to take part in it. That’s one red carpet you want to avoid.

Protect your credit – protect your identity – protect yourself with a free MoneyTips trial.

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