Most consumers see ID theft in their futures

Jun 22nd, 2021 | By | Category: Personal Finance/Consumers

Where do you see yourself in a year? If you’re like most Americans, you might expect to be dealing with the financial fallout of identity theft. Sixty percent believe it is likely that identity theft will cause them a financial loss in the next year, according to new research conducted by The Harris Poll on behalf of the American Institute of CPAs (AICPA).

“Law enforcement has reported a big spike in online scams during the COVID-19 pandemic. Taking time to review your bank statements and credit card activity for unauthorized transactions, while also putting safeguards in place like complex passwords, credit card usage alerts and two-factor authentication, can go a long way to mitigate the threat of ID theft,” said Gregory Anton, chairman of AICPA’s National CPA Financial Literacy Commission.

“Safe steps,” he added, “also include exercising caution when reading emails and clicking on links, learning about the latest scams, and being mindful of your online presence.”

Fifty-six percent of Americans in the poll said they have increased their overall online shopping since the start of the pandemic, with nearly a third (31 percent) saying it has increased significantly. While convenient, online shopping is not without a risk. Fraudsters can gain access to private website data such as your personal information and financial details which can be used to make unauthorized purchases, or even open new accounts exploiting your identity.

The survey found that since the start of the pandemic, more than a third of online shoppers (37 percent) have stored logins, passwords, or credit/debit card information on websites or apps, while only  28 percent have set up alerts on their credit or debit card for when a purchase is made without their card being present. These stats may be why in the past year one in five Americans (19 percent) have suffered identity theft or attempted identity theft. These incidents can be quite costly, as Americans lost a total of $16.9 billion in 2019 to identity fraud, according to Javelin Strategy & Research.

While basic steps can help prevent being victimized by fraud, few shoppers are taking them. The survey found that 45 of Americans have checked their credit or debit card statements to ensure that the charges match their actual purchases since the pandemic began. Further, nearly 39 percent admit they use the same username and/or password across multiple websites.

“Using the same username and/or password across multiple websites is like using a master key for every locked door in your life. If just one online account becomes compromised, scammers will have the keys to the information behind every password protected account,” said Kim Hardy, CPA/CFF, member of the AICPA’s National CPA Financial Literacy Commission. “The surge in online activity as people are spending more time at home during COVID has presented bad actors even more opportunities to steal identities. In this environment, it’s essential that Americans are defending their personal information from fraudulent threats.”

While the survey finds that 67 percent of Americans have at least looked at their credit report, that leaves 33 percent who have never checked their report. And those with a household income of less than $50,000 were found to be twice as likely to never have looked at their credit report than those with a household income of $100,000-plus. A credit report lists all the debt taken in your name and serves a clear way to see if there are any inaccuracies such as someone taking out loans or credit cards using your identity which can ruin your credit score, AICPA noted.