UPDATE: Security breaches are becoming all too common and costly for consumers. Global Payments is the latest company hit. The company says less than 1.5 million Visa and MasterCard account holders may be impacted. Global Payments says while credit card data was compromised; individuals names, addresses and social security numbers were not accessed. While the company says the incident is contained, does a security breach increase your chance of becoming a victim of fraud or identity theft? According to Javelin Strategy & Research, Inc., the answer is often yes when data is breached.
Javelin conducts an “Identity Fraud Survey Report” each year. The company says analysis of surveys from 2008 to 2011, found those notified of a breach have a dramatically increased chance of becoming a fraud victim.
The company looked at those consumers who said they were notified of a breach and those who became actual fraud victims. Four years ago, if you were notified of a breach you were three times as likely to become a identity theft victim. In subsequent years, your chances rose. By 2011, the fraud rate for those who received a letter notifying them of a breach was 9.5 times higher than the rest of the population.
It appears from this analysis of over 5,000 people that the fraud chance gets worse as time passes. Just as you let your guard down, the thieves may strike. Plus, most companies only give you six months or a year of free identity or credit monitoring if any at all.
These are simply statistics from one research group. Fraud is dependent on the extent of the breach and the thieves intentions. It’s why consumers need to be vigilant all the time. Most credit card companies protect you from fraudulent purchases, but identity theft goes much deeper and it’s much harder to correct.
I advocate checking your credit report year round. It’s advertised that you have access once a year for free from the three credit reporting agencies via Annual Credit Report. Instead of checking all three at once, check one every four months. For example, in January check Experian. In May, check Equifax. In September, check TransUnion. Then repeat the cycle the following year. You can check the reports in any order you wish.
I think it’s a little overzealous to buy identity theft insurance or monitoring. If this is really something you feel you want for peace of mind, ask the financial institutions you already do business with if they offer the service. It’s often cheaper and prevents you from giving your information from another party. That won’t hold truth, though, if a third-party offers the service through your financial institution.
Just shop around and do your homework if you choose identity theft protection or credit monitoring services. Not all services are created equal and consumer advocates often find they’re not really worth your money. Click here for Consumer Reports analysis of the industry.
Related links you may like:
Report: hacking is the source of most security breaches
Citigroup says breach impacts 360,000+ customers
Cyber attack hits Zappos customers
Recovering from identity theft
Top identity theft services
Free identity theft help