The Identity Fraud Economic Divide: Reduce Consumer Losses by Customizing Protection Efforts to Income Levels

Table of Contents

• Overview
• Primary Questions
• Findings and Analysis
• Methodology and Definitions
• Recommendations
  • Lower Income Segment
  • Higher Income Segment
• Higher Income Has Highest Fraud Rates at 5.37%, But Lowest Consumer Costs
  • Lower Income Has Lowest Fraud Rates, but Highest Consumer Costs at $603
• Lower Income Hindered by Disinclination to Transact Online, Not Necessarily Lack of Access
  • Some 57% of Lower Income Access Web Versus 69% of all Consumers
• Victims Who Switch FIs and Forms of Payment May Have Greatest Impact
  • After Identity Fraud: Lower-Income Victims Avoid Online Banking while Upper-Income Victims Increase Online Monitoring
• Debit Card Fraud More Prevalent for Lower Income
  • Credit Card Fraud More Common Among Middle and Upper Income Segments
• For Lower Income Individuals, Fraud Takes Longer to Detect
  • Time from Compromise to Misuse Significantly Shorter for Middle to Upper Income
• Higher- and Middle-Income Groups Victimized More Often with New Store-branded Credit Cards
  • Lower Income More Often Defrauded with New Telephone Accounts
• Highest Income Level Suffers Highest Rates of Existing Card Fraud at 4.54%
  • Existing Card Fraud Higher for All Levels of Income
• Appendix
• Higher Income Consumers $100K-$149K Pay Higher Average Consumer Costs ($709)
  • Income Breakdown Shows Resolution Time Grows as Income Shrinks
• After Fraud, Different Income Groups React in Opposite Ways
  • Higher Income Turns to Online Monitoring; Lower Income Turns Away from Online Channel
• Consumer Education Needed
  • Some 68% Access Internet but only 60% Use Anti-Malware
• Highest Average Fraud Amounts and Consumer Costs Experienced by Upper Income Asians despite Fast Resolution Times
  • African Americans Suffer Highest Rates but Lowest Fraud Amounts of any Ethnicity
• Middle Income Victims More Likely to Experience Fraud from a Purchase or Transaction
  • Family Members Are Frequent Fraud Sources for Upper and Lower Income Victims
• Regardless of Income Level, Half of All Fraud Victims Monitor their Accounts Online More Frequently
  • Two-thirds of Victims Avoid Online Registration of Personal Information
• Nearly Half of Existing Non-Card Fraud Victims are Lower Income Individuals
  • Middle Income Consumers Comprise 30% of Existing Non-Card Victims
• Misuse Duration Is Significantly Shorter for Most Middle- and Higher-Income Consumers
  • Almost 16% of Lower Income Consumers Report Misuse that Lasts One Year or More
• Lower-Income Victims Engaging In More Traditional Fraud Protection Activities Prior to Information Compromise (By Income Group)
  • Online Bill Pay Is Low among Fraud Victims from All Income Groups
• The Lower the Income Level, the Longer the Fraud Detection Times
  • Over Half of Middle- and Upper-Income Victims' Frauds Are Detected Within One Week

Table of Charts

• Chart 1: Incidence Rates, Fraud Costs, and Resolution Times (by Income Level)
• Chart 2: Consumer Behaviors among Individuals with Internet Access (By Income Level)
• Chart 3: Impact of Identity Fraud on Consumer Behaviors (by Income Level)
• Chart 4: Existing Credit Card versus Existing Debit Card Fraud (by Income Level)
• Chart 5: Fraud Lifecycle and Resolution Time (by Income Level)
• Chart 6: Prevalence of New Account Fraud (By Income Level)
• Chart 7: Table of One-year Fraud Incidence Rates (by Income Level)
• Chart 8: Incidence Rates and Average Fraud Costs (by All Income Levels)
• Chart 9: Changed Behaviors of Highest Income and Lowest Income Adults Due to ID Fraud
• Chart 10: Consumer Financial Behaviors (All Consumers)
• Chart 11: Table of Incidence Rates and Average Fraud Costs (by Ethnicity)
• Chart 12: Source of Theft of Personal Information (by Income Level)
• Chart 13: Consumer Behavior Changes after Fraud Victimization (All Fraud Victims)
• Chart 14: Breakdown of Existing Non-Card Fraud Victims (by Income Level)
• Chart 15: Duration of Misuse (By Income Level)
• Chart 16: Consumer Financial Behaviors (By Income Level)
• Chart 17: Fraud Detection Times from Misuse to Discovery (By Income Level)