More Smartphones, More Smart Thieves

A new study shows 13 percent rise in ID theft cases in 2011, totaling more than 11.6 million in the U.S. as opposed to 10.2 million in 2010, according to Javelin Strategy and Research.

Identity theft poses a serious threat to personal finance, and consumers heighten risk as they enter personal data on mobile devices. But the attacks are not proceeding unchecked, as consumers, services and law enforcement step up efforts to prevent and address credit card fraud and identity theft.

Consumer education is responding, with tips available from public service commissions and consumer advocate agencies like the Better Business Bureau. Operating safely online could be as easy as thinking ahead. Javelin, for example, suggests not making purchases on an unsecured Wi-Fi network, and reporting any problems such as unauthorized transactions immediately can cut potential losses.

Government, too, is taking notice of the growing vulnerability of customer data, with bills proposed to protect consumer information, and new guidelines for businesses that may have been targets of data breaches.

As online shopping and banking becomes more popular, so does credit card fraud, with 2.3 percent of all adults discovering unauthorized charges on their cards last year, compared to 1.4 percent in 2010. Users who process personal information, like banking, on their smartphones should take extra precautions, since services like Android could be vulnerable to hacking attempts.

Javelin found 7 percent of smartphone users were victims of identity fraud, which is one-third higher compared to the public.

A rise in data breaches across multiple online services platforms is one possible explanation for the rise in identity theft incidents, partly because exposed information often has debit or credit card numbers, and Social Security numbers. Customers notified of a data breach in a service were almost 10 times more likely to become a victim of identity theft.

Despite the rise in these cases, consumer out-of-pocket losses decreased by 44 percent since 2004. Javelin attributes this to the rise of services to help people protect themselves -- like free or low-cost credit monitoring, fraud alerts, credit freezes, and database scanning.

At this point, consumers routinely make simple transactions like banking and shopping on a digital platform, and recent figures suggest no changes in that pattern. The increase will continue to represent a big target for identity theft perpetrators who are known to find new methods of infiltration, shifting more responsibility on service providers and government agencies to create safeguards for mobile transactions.