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Identity Fraud Cost Americans $43 Billion in 2023

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This image illustrates the impact of identity fraud, as described in the article. This scene reflects the emotional and financial distress faced by victims of identity theft. Image by Rafaelo Gallery
This image illustrates the impact of identity fraud, as described in the article. This scene reflects the emotional and financial distress faced by victims of identity theft. Image by Rafaelo Gallery
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Texas Border Business

A recent report cosponsored by AARP reveals that identity fraud is becoming increasingly costly for American adults, with total losses amounting to $43 billion in 2023. This substantial sum includes $23 billion attributed to traditional identity fraud, impacting around 15 million individuals, consistent with the previous year’s data. Despite the stable number of victims, there was a 13 percent increase in financial damages last year.

The report, entitled “Resolving the Shattered Identity Crisis” and produced by Javelin Strategy & Research, also highlights those scams orchestrated by criminals accounted for just over $20 billion in losses. The growing per capita losses indicate that criminals target higher-value gains once they gain unauthorized access to consumers’ accounts.

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The study surveyed 5,000 Americans aged 18 and over, suggesting that the reported losses represent just a fraction of the overall impact of identity fraud, which is often underreported. According to Suzanne Sando, Javelin’s senior analyst in fraud and security and author of the report, many victims do not report these crimes due to the associated stigma. Sando emphasizes better support systems to help victims feel safe in reporting their experiences.

Traditional identity fraud typically involves the unauthorized use of personal information, such as Social Security numbers and bank account data, for illicit purposes. This can lead to direct financial theft from bank accounts or fraudulent credit card transactions.

The report also notes an increase in account takeover and new-account fraud. In 2023, account takeover fraud led to nearly $13 billion in losses, an increase from $11 billion in 2022, while new account fraud escalated to $5.3 billion from $3.9 billion. The proliferation of consumers’ online activities, including social media use, contributes to these rising risks, facilitating criminals in taking over multiple accounts.

Identity fraud can occur through various scams, including phishing emails that seek to harvest personal information or impersonation scams that spoof trusted entities to extract sensitive data from victims. These tactics highlight fraudsters’ sophisticated methods to exploit and manipulate personal information for fraudulent activities.

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