FTC Downplays Cost Of Identity Theft To U.S. Businesses And Consumers

December 2, 2007 7:48 a.m. EST

Washington, D.C. (AHN) - A government report downplays the extent of identity theft in the United States, insisting that the incidence has declined by 16 percent between 2003 and 2005.

The Federal Trade Commission (FTC) said only approximately 8.3 million Americans over the age of 18 were victimized in 2005, compared with the estimated 9.9 million victims in 2003, based on the agency's latest survey.

Of the 8.3 million, 1.8 million discovered fraud committed using their personal information, 3.2 million had their credit card accounts misused, and 3.3 million experienced misuse of other financial accounts.

In dollar terms, identity theft cost consumers up to $1.2 billion in 2006 while the damage to U.S. businesses reached a staggering $55.7 billion.

In its report, FTC admitted though its sample size was too small to conclude that its findings were "statistically significant." FTC used a random-digital-dialing sampling for interviews.

The National Consumers League (NCL) cautioned that FTC's claims should be taken with a grain of salt.

"It's a difficult thing to get a precise handle on. These surveys are helpful but may not show what's really happening," said NCL vice president of public policy said Susan Grant.

She said consumers are often oblivious that they have been victimized, thus, will not seek help from authorities.

Avivah Litan, a senior fraud analyst at research company Gartner Inc., said it is difficult to know the real number of victims.

In a study in October, the U.S. Secret Service revealed that the average cost of identity theft and resulting fraud in cases it solved over a six-year period was more than $31,000.