Great News! Only 8.1 Million People Victimized by Identity Theft in 2010

Ugh.  It really is a sign of the cynical times in which we live when “only” 8.1 million people who have been victims of some type of identity theft is considered to be an improvement.  But according to this article and a recent report, that’s 3 million fewer victims than 2009.

The report attributes the drop to a supposedly dramatic decrease in the number of data breaches whereby large amounts of personal information are exposed to or accessed by identity thieves.  In 2009, there were 604 breaches.  In 2010, the number decreased to 407 or 26 million records exposed.  Yippee!  While the article notes that banks and other companies are taking stronger precautions to prevent data breaches, it’s silent as to why companies are doing that.

I like to think that it’s due to all of those data breach notification laws that 46 states have passed, since California first did so in 2002 (and why haven’t you done so Alabama, Kentucky, New Mexico, and South Dakota?).  These laws require companies to notify consumers if their personal information has been compromised. And needless to say, once a company does that, it spreads like wildfire on the Internet.  As companies have learned, informing the public that their data has been compromised can be very bad for business (and can even result in bankruptcy, e.g., CardSystems Solutions, Inc).

The article gives 4 common sense things to do to minimize your chances of becoming an identity theft victim:  (1) Protect your own personal data, and start by investing in a shredder; (2) monitor your bank and credit card accounts at least once a month; (3) pay attention to any notices that you receive from companies regarding the theft or loss of your own personal information; and (4) don’t share so much on social networks (like Facebook).

Number 4 is my favorite because I firmly believe that people disclose far too much about themselves on-line to folks they don’t know very well.  TMI! I can’t tell you how many times as a lawyer I’ve seen companies claim trade secrets in certain information, only to find out that it’s the companies themselves which freely disclose this supposedly confidential information on their own websites and social media sites, at business presentations or seminars, to customers, or to vendors (for example).  So it’s these voluntary disclosures that can come back and bite you.  Remember, there are a lot of smart identity thieves out there who pray upon our vanity and our belief that they are interested in what we have to say about ourselves.  And they really are interested—but for all of the wrong reasons.

And it can be an expensive mistake.  According to the article, it cost victims an average of $631 in 2010 (up 63% from $387 in 2009) to rectify the situation. And this doesn’t include all of the time spent, phone calls made, and general aggravation in doing so.  In addition, a victim may also have to hire a lawyer in some cases to clear his/her name, which costs far more.  In any instance, let’s see if the drop continues from 2010 to 2011.  Criminals are always inventing new ways to dupe us and get access to our information, and I wouldn’t bet against them just yet.

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