How Identity Theft is Affecting the Economy

Being a victim of identity theft, you suffer trauma and it impacts different facets of your life. It affects the victim’s emotions, health, finances, social relations, and the economy in general. Identity theft happens every day – to individuals and corporations alike. Identity theft is a crime of many shapes and forms which circles around the misuse and abuse of stolen personal or corporate information.

The stakes are definitely high with the increase in identity theft victims each year. A 2012 research shows that around 16.6 million Americans have experienced identity theft during that year which reported financial losses amounting to over $24.7 billion. In the corporate scene, a rough estimate of over $50 billion is said to have been lost due to identity fraud while businesses have spent around $1.5 billion to repair and avoid losses brought about by fraudulent claims. Company losses would ultimately result to major retrenchments in the industry which affects overall economic and financial equilibrium.

The numbers just start spiking especially with recent data that the costs and losses of identity theft in the United States have peaked at $100 billion per year. There is indeed no exaggeration that identity theft is exploding and is now a lucrative business for a lot of crooks who are eyeing private confidential data as investments that is worth billions of dollars. In fact, according to recent data from the U.S. Department of Justice, credit card data theft is has exponentially increased at 50% from 2005 all throughout 2010.

What is even more horrendous is the fact that identity theft is fast exceeding the numbers of traditional theft. Security analysts believe that criminals know for a fact that hacking into corporate websites or hard drives are more profitable than doing the traditional route because they are able to steal vital data like credit card numbers and bank account details by millions.

The economy is continually exhausted financially by identity theft crimes happening in all parts of the world. The losses and damages are staggering in proportions and extent because most merchants or businesses invest on top-of-the-line preventive measures – from the best security personnel to information security programs – that would keep identity theft at bay and repair damages caused by this crime of the century.

Repairing and recovering from identity theft bears a hefty price tag for the economy. Banks and other financial institutions are more knowledgeable now and can spot fraudulent activity in action which helped them become proactive than reactive in setting up layers of security defenses to protect their clients from being victimized by fraudsters. They have also painstakingly covered for the losses which made clients felt protected and secure with their investments; but economists doubt that such would even be sustainable in the long haul.

Point-of-sale hacking has also dramatically increased. McAfee, a software security company, has discovered around 130 million malware programs from the internet which are designed to cleverly infiltrate point-of-sale systems and steal customer data. Computer systems are vulnerable to hacking which means merchants cannot really assure clients that their data is 100% protected online.

The economy is trying to buffer itself with continuous slams and financial losses brought about by identity theft. Losses incurred due to identity theft and fraud has incremented over the years which is putting a lot of toll in the economy today and can affect the future. Most businesses would not bother pushing through police investigations because it can be lengthy and expensive while the chances of solving these crimes are quite slim. As a result, identity thieves get away scathe-free. Their mechanisms have even become more sophisticated the recent years. People must really be diligent in monitoring their credit and also in setting up more alerts to extensively protect personal and corporate data for long term.