Identity Theft and Credit Card Monitoring Consumer Shopping Study: 2020
29 Million Americans Intend to Purchase A Monitoring Service in Next 12 Months Due to Rising Incidents of Fraud and Theft
Last Updated: June 9th, 2020
Billions of private records are breached every year, from email addresses to names and phone numbers to sensitive banking information. In fact, during just the first half of last year, more than 4.1 billion records were exposed in hacks and other cyberattacks, opening up nearly every consumer to the risk of fraud and theft.i
From phony credit card accounts or bogus charges to stolen identities used to run up thousands of dollars in debt, credit card fraud and ID theft have become all-too-common realities in modern life. As more and more of our time is spent online shopping and sending and receiving sensitive information over the internet, data breaches have continued to surge.
The nonprofit Identity Theft Resource Center identified 498 data breaches in 2009, and by 2019, that number had risen to 1,473, an increase of more than 195 percent.ii If that weren’t bad enough, the coronavirus pandemic has presented a golden opportunity for fraudsters seeking to capitalize on the uncertainty and fear the virus has brought with it. The World Health Organization (WHO) says it has a fivefold increase in public-targeted email scams associated with COVID-19.iii
It’s clear that cybersecurity, particularly the protection of consumers’ sensitive financial and personal information, is important, but how many of us have taken steps to safeguard our private data?
Here are key findings from our research on usage of and attitudes toward identity and credit card theft and fraud protection products:
- Nearly half of Americans (47 percent) have been victims of credit card fraud and 18 percent of Americans have been victims in the last year. Twenty-five percent of credit card fraud incidents were for more than $1,000. Most report getting all of the money back from the fraud.
- Nearly one in four Americans (23 percent) have been victims of identity theft, and seven percent of Americans have been victims in the past year. Half of cases involved the victim losing money. In identity theft cases where victims report money is lost, 45 percent of the time it is for more than $1,000 and victims get the money back 62 percent of the time.
- Fourteen percent of Americans are interested in subscribing to a monitoring service in the next 12 months. This represents 29 million adults and potential $2.9 billion in annual revenue, assuming an average of $100 per year.
- The rise of thefts over the last 12 months is a major driver of identity theft and credit card monitoring solutions. Someone who has been a victim in the last year is three and half times more likely to have subscribed to a service in that time period.
- Americans that have identity theft protection services were more likely to get all of their money back in an identity theft case that involved financial loss. In general, Americans have positive views of these services.
Credit Card and Identity Theft & Fraud: A Growing Problem
Identity theft and credit card fraud are crimes, and the federal government has several tools for tracking how often these crimes happen — and how often they’re reported.
One such tool is the Consumer Sentinel Network, operated by the Federal Trade Commission, which tracks consumer fraud and ID theft complaints to law enforcement at all levels, from local to federal. According to the agency, about 3.2 million fraud reports were made in 2019, with identity theft topping the list. In just the past few years, the number of reports has climbed by more than 10 percent.
Credit card theft and fraud is more common than identity theft. Nearly half of Americans (47 percent) have been victims of credit card fraud and 18 percent of Americans have been victims in the last year. Nearly one in four Americans (23 percent) have been victims of identity theft, and seven percent of Americans have been victims in the past year.
While the majority of people in our survey indicated that they had suffered credit card theft or fraud or ID theft at some point in their lives, men were more likely to report being victims of identity theft, while women were more likely to report credit card theft or fraud.
Cases of identity theft tend to be much more costly than credit card theft or fraud. Our survey found that only about one in four people who reported a credit card theft or fraud incident lost more than $1,000, while almost half of those targeted by ID theft lost that much money.
High Interest in Monitoring and ID Protection Services
Our 2020 Digital Privacy Study indicated that about 71 percent of Americans said they were either “concerned” or “very concerned” about how secure their personal and financial information is. But is that concern translating into action? And, perhaps most crucially, are these products effective enough at keeping private information private?
According to some industry reports, by 2027 the global ID theft protection market is expected to be worth nearly $9 billion, thanks largely to the growth of e-commerce and digital payments.iv
Approximately 14 percent of consumers indicate that they plan on purchasing identity theft protection or credit card monitoring in the next 12 months. This equates to $2.9 billion in annual revenue for these services, assuming an average annual cost of $100 (LifeLock plans begin at $9.99 per month). An additional 15 percent of consumers are in the market and intend to buy, but will likely do so in “more than one year.”
The intent to purchase is driven heavily by being a recent victim. Someone who has been a victim in the last year is three and half times more likely to have subscribed to a service in that time period. Similarly, 25 percent of recent victims that do not already have identity theft protection plan to purchase it in the next year, twice the rate of consumers that have not been victims.
Perhaps not surprisingly, enrollment in ID theft and credit card protection services tends to be more common among those with high income levels than it is in people on the lower end of the economic spectrum. For most income brackets, the majority of people don’t subscribe to credit monitoring or ID theft protection, but about three-quarters of those who earn $150,000 per year or more report being subscribers.
How Well Do Consumers Believe These Protections Work?
Depending on the type of service and sometimes the level of protection the subscriber pays for, credit card monitoring and ID theft and fraud protections can alert users about suspicious activity before a loss occurs or notify them if their information shows up in the online spaces frequented by fraudsters.
Sentiment for these products among those who subscribe is high — 71 percent of those who subscribe to the services believe ID theft products adequately inform users of theft incidents.
In addition, we found that nearly two-thirds of those who subscribe to ID theft protection services and had a loss incident were able to recover all of their stolen money vs. only about half of victims who didn’t have ID theft protection.
There were no significant differences in this rate for those who had a credit card-related loss, which is likely due to the fact that most credit card companies today provide customers with a variety of tools to easily dispute fraudulent charges.
Even among non-subscribers, negative views of ID theft protections are quite rare. About 60 percent of those who don’t currently subscribe say they aren’t sure whether ID theft protection services are helpful in preventing fraud, while 56 percent of non-subscribers say these products do help inform users after a breach has occurred.
We asked more than 500 American household decisionmakers the week of May 17th to 23rd, 2020 a set of detailed questions about their experiences with credit card monitoring and identity theft products. Data from the report also comes from NortonLifeLock, the Federal Trade Commission and the Identity Theft Resource Center. Security.org's research team focuses on physical safety, digital safety and identity theft. What it means to be safe has expanded beyond just home security and means protecting our personal and financial data and digital footprint. We study the issues facing modern society and partner with organizations and research institutions to broader America's understanding and awareness of digital safety.
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