US Child Identity Fraud Victims Lost $2.6bn Last Year
Over one million US children fell victim to identity fraud last year, resulting in losses of $2.6bn, according to a new study from Javelin Strategy & Research.
The research firm polled 5000 adults who live in a household with a dependant child or have done so in the past six years.
It found the impact on children of data breaches can be more severe than for adults: 39% of child breach victims were then defrauded, versus 19% of notified adults.
Two-thirds of child fraud victims are under eight, and it’s thought that because they have limited financial records on file, children offer fraudsters a great opportunity to open new fake accounts in their name. However, because few kids have plastic, card fraud is rare.
Thus, while adults are targeted for the value of their account, children are targeted for the value of their identity.
This has proven to be a goldmine for the fraudsters, who can on average steal $2303 from their victims — more than twice the mean fraud amount for adult fraud victims. The impact is even greater because while adult victims usually get their money back, the families of child ID fraud victims paid on average $541.
Interestingly, 60% of child ID fraud victims know the fraudster, versus just 7% of adult victims. Javelin claimed that many of these scammers abuse the legitimate access they have to the personal information of their victims.
The report also claimed that children who are bullied online are more than nine-times more likely to be victims of fraud than those who are not bullied.
“In many cases, fraud and bullying are not perpetrated by the same individual but arise from the same underlying vulnerabilities,” said Al Pascual, senior vice-president at Javelin. “Children who are unprepared to protect themselves from online risks are likely to encounter individuals who wish to target them emotionally or financially. Bullied children also may be more vulnerable to fraud as they are taken advantage of when they seek friendship online.”
The report urged parents to monitor their children’s bank accounts, pay attention to breach notifications and train their kids to be more savvy about protecting their identity.
Source: Information Security Magazine