Identity theft is a unique crime in that, unlike having a material possession stolen from you, its impact can be lasting. When people think of “theft,” they often think of the monetary and emotional cost of losing and replacing items. That same loss occurs when one’s identity is stolen, but the recovery isn’t always as simple. Here, we explore the “real cost” of identity theft and how consumers can better prepare themselves for the possibility of the crime.
The financial burden
According to the Bureau of Justice Statistics, the total financial loss from identity theft in 2014 alone was approximately $15.4 billion. While it still seems like a large sum of money, the number actually decreased from a 2012 survey that found a loss of $24.7 billion. These numbers still top other types of theft, like burglary and property theft, which only totaled $14 billion in 2012.
On a national scale, the financial impact of identity theft is apparent. That effect becomes even clearer when you look at individual cases. The BJS reported that 14 percent of identity theft victims experienced out-of-pocket losses. While some of these can be fairly minimal, with half of these out-of-pocket losses amounting to less than $100, others are not so lucky. The BJS has also found that the average household loss due to identity theft was around $2,200.
The abstract costs
After experiencing identity theft, many victims have to endure the tiring process of rectifying their credit and trying to ensure the crime never happens to them again. Because of its varying degrees of severity, identity theft can either have a simple or extremely complicated recovery process. For example, in most cases, credit fraud can be more easily resolved than medical identity theft.
“You do have people where they have an existing account and they can resolve the issue by going to one merchant,” Eva Velasquez, president and CEO of the Identity Theft Resource Center, told Bankrate. “We hear on a regular basis from people in our call center who are definitely experiencing the type of ID theft that has a lot of complexity involved.”
That complexity is what brings time into the equation. For some victims, recovery takes a day or two. For others, it can be years. The New York Times wrote of one man, David B. Dahlstrom, whose identity was misused for 17 years by a German immigrant in Los Angeles. The theft nearly ruined Dahlstrom’s credit and, at one point, even resulted in him being detained on an arrest warrant in his name.
The length of the crime took an emotional toll on Dahlstrom, who told the New York times he often felt stressed, violated and confused. These emotions are not uncommon among victims of identity theft.
What makes protection possible
Because there’s no certain method to lessen the severity of identity, experts often stress the importance of personal security. In addition to money, identity theft also costs its victims time and a sense of safety – two values that are often difficult to recover.
Consumers can work to guard their information by practicing good online safety habits. This means frequently changing and using strong passwords for all accounts, selectively sharing personal information and never opening strange emails, especially those with attachments.
Beyond the Internet, consumers should also shred old documents with sensitive information and take advantage of the Fair Credit Reporting Act and request their free credit reports to look for errors or fraudulent activity.
Consumers ready to take a more active approach to identity theft protection can invest in a service like Identity Guard that can monitor their Social Security Numbers and credit files, alerting them to certain activity that may indicate fraud.