12.6 Million Reasons Why Identity Theft Matters

Identity theft is the top complaint in America, as it has been for 13 years.

ByABC News
March 3, 2013, 10:51 AM

March 3, 2013— -- If you still believe identity theft is a marketing gimmick, it's time to take a look at the Federal Trade Commission report released this week. Identity theft is once again the top complaint in America, as it has been for 13 years. Identity theft complaints surged by 32 percent in 2012 to nearly 370,000, and that number is intensified by the most recent Javelin report, which puts the number of instances of identity theft at 12.6 million. Even Javelin's figure is probably way lower than the real number, when you factor in all the cases that go unreported or categorized improperly.

It is no longer a question of if your identity will be stolen -- the only unknown is when it will happen. The same goes for companies and government agencies that gather personal data on employees and consumers: there will be a data breach.

Hackers, identity thieves and fraudsters of all stripes have reached the conclusion that a stolen identity is a key that can unlock all kinds of fraud: opening doors to millions of dollars in instant profit, providing access to medical products, services and/or treatments on someone else's dime, even offering up an innocent fall guy to law enforcement officials all to eager to "get their man." Even if criminals weren't relentlessly hunting for our personal information (which they are), the steady stream of massive data breaches at companies and government agencies from the Department of Veterans Affairs to Blue Cross Blue Shield to the U.S. Environmental Protection Agency to the South Carolina Department of Revenue to Sony to Twitter to LinkedIn (to name a few) guarantee that at least some, if not all, of your personal identifying information has already has been exposed to folks who know how to take the particulars of your life to promote their welfare.

The largest area of growth in the FTC report by a mile has to do with tax returns. Identity thieves have clearly developed a preference for this low-hanging fruit, and the closely related practice of using someone else's Social Security number to apply for a job (and sticking the victim with the tax bill). In 2010, only 15 percent of identity theft cases involved tax or wage fraud, which was more or less even with credit card, phone and utilities fraud.

According to the FTC, identity theft was the most common type of crime reported to them last year, accounting for 18 percent of all complaints, nearly twice as many as the next category -- debt collection -- and significantly higher than in 2011, when identity theft accounted for 15 percent of consumer complaints.

After two years of solid increases, however, last year tax- and wage-related fraud accounted for an astounding 43 percent of all identity theft complaints. Compared to other types of identity fraud, it wasn't even a contest. The next most common complaint was credit card fraud, which accounted for some 13 percent of reported crimes.

What is going on here? It's hard to say for sure, but Florida is illustrative of the problem. For years, the Sunshine State has hovered around the five spot in the top 10 list of states with the worst identity theft epidemics.

Last year Florida blew all the other states away. About 360 Floridians per 100,000 reported ID theft to the FTC last year, nearly twice the rate of runner-up Georgia and three times greater than California, which came in third. The complaint rate in Florida in 2012 was more than twice what it was just a year before.