A drill sergeant would shout it out loudly and clearly: “People, strengthen your passwords!” That’s a critical recommendation to emerge in an AARP-sponsored report that examined identity fraud and found more than 1 in 4 Americans were hit by identity fraud last year, when losses were almost $17 billion.
Identity fraud is worse than identity theft, which is when your personally identifiable information (PII) is stolen or compromised, as in a data breach. In identity fraud cases, a crook capitalizes on that sensitive data and rips you off or commits a related offense, says Javelin Strategy & Research, which wrote the report after surveying 5,000 adults in the U.S.
‘Great digital migration’
With loads of shopping and other transactions moving online, especially during the pandemic, what’s happening will eventually be described as the “great digital migration,” the report says. And 2019’s estimated $16.9 billion in losses could climb as consumers adapt to a “digitally infused lifestyle.”
Today, people want contactless, safe and faster personal and financial transactions and, according to the report, the good news is that desire will drive commercial innovation. The bad news: Forecasts call for “increased criminal acts that target consumers and monetize their personally identifiable data,” says the report, entitled “Identity Fraud in Three Acts: A Consumer Guide.” The report focuses on adults 55 and older.
Create an action plan
What to do? Create an action plan to keep safe — and stronger passwords are a good start. It’s risky for a consumer to use an identical sign-on name — coupled with the same, weak password — across multiple social-media accounts, bank accounts and e-commerce sites, says Javelin’s John Buzzard, who wrote the report.
“Once the criminal cracks the formula, so to speak, and they take over your account, they just start to take over everything because you’ve made it very, very easy for them,” says Buzzard, the lead analyst for fraud and security at Javelin, based in Pleasanton, California.
Here’s more for your action plan:
1. Use a password manager tool or app. Password managers such as LastPass or Bitwarden store and protect passwords using strong encryption. Both offer free and for-a-fee services and you can find them in the App Store or online.
2. Secure personal payments with digital wallets such as Apple Pay and Google Pay. They’re standard features on most smartphones and retailers accept them widely. Wallets use encryption to prevent payment card information from being shared in the open with merchants.
3. Lock your payment cards. Many financial institutions offer card controls that manage how and where payments can be made. Consumers also can decide if they want to limit amounts spent, restrict spending to geographical areas or prevent card use at certain types of merchants, such as jewelry stores.
4. Enable two-step authentication to access digital accounts. Onetime access codes make it difficult for criminals to take over sensitive email, financial and mobile phone accounts.
5. Hang up on strangers, and independently verify everything. Do not speak to people you do not know who contact you about sensitive, urgent or threatening personal business matters.
6. Write down important telephone numbers and keep them in a safe place. Criminals are now posting fake customer-service numbers online. It’s safer to make a list of trusted companies so you may reach them quickly.
7. Safeguard every computer device with stronger security methods. Mobile phones, laptops and tablets typically contain sensitive PII, so access to every digital device should be secured with complex passwords and screen locks that use a fingerprint or facial recognition.
8. Install anti-malware protection on all digital devices: laptops, mobile phones, personal computers and tablets.
Key findings of survey
The action plan arises because of key survey findings:
- Twenty-seven percent of respondents ages 55 to 64 said they had been victims of identity fraud, and 26 percent of those 65 and older. However, when identity fraud strikes these older adults, the financial damage is far less than the national average.
- Most adults 55 and older reported having a hard time remembering passwords. Among those ages 55 to 64, it 56 percent said they have difficulty, and among those 65 and older, 60 percent.
- Men and women 55-plus lead “digitally infused” lives. Two-thirds use online banking weekly, which is higher than adults ages 18 to 44. With respect to smartphones, 81 percent of people ages 55 to 64 have them, and so do 77 percent of those 65 and older.
- Identity fraud victims do not necessarily change their behavior afterward. Among those 65 and older, 70 percent reported reluctance to avoid certain merchants, switch forms of payment, spend less money online, spend less in physical stores and switch their credit-card companies or banks.
- Consumers 55 and older want banks to start using stronger security protocols. Roughly 90 percent want more fingerprint scanning and roughly 80 percent view facial recognition as trustworthy for financial transactions and private business matters.
- Consumers 55 and older are adopting safer practices: More than 50 percent have enrolled in identity-protection or credit-monitoring services, and 29 percent have enabled credit freezes at credit bureaus.
The online survey of a representative sample of 5,000 adults occurred from Oct. 22 to Nov. 4, 2019. The survey’s margin of error is plus or minus 1.41 percent when all 5,000 respondents answered questions; it is plus or minus 3.22 percent for questions answered by identity fraud victims.
Reprinted from AARP Fraud Network