Identity theft — when a criminal steals personal information such as a social security or credit card number — remains one of the most popular scams in the United States. Just as the importance of digital identities and online transactions has risen during the age of the Internet, so too has the incidence of fraud-related activity — especially identity theft.
The Federal Trade Commission’s Consumer Sentinel Network received more than 3 million consumer complaints in 2015, 16% of which were identity theft complaints. Scams involving government documents, such as when a social security is stolen to file a fraudulent tax return, were the most common method of identity theft, followed by credit card fraud. Credit card fraud involves criminals using another person’s credit card to make purchases or using another person’s information to open credit card accounts.
Missouri reported 22,164 identity theft complaints, or 364.3 per 100,000 people — by far the largest incidence of identity theft of any state. Connecticut and Florida reported the second and third highest incidence of identity theft, and California rounded out the top 10. 24/7 Wall St. reviewed the 10 states with the most identity theft per capita.
While the number of identity theft victims in a given year represents a relatively small proportion of the U.S. population, the problem is only getting worse. The number of fraud complaints has steadily increased almost every year since 2001, when just 325,519 complaints were documented.
> Identity theft complaints per 100,000:158.1
> Total identity theft complaints: 15,684 (7th highest)
> Fraud and other complaints per 100,000: 1,144 (5th highest)
> Avg. amount stolen: $820 (7th lowest)
Nationwide, credit card fraud is more common than phone or utilities fraud. Michigan, however, bucks the trend. Only 12% of identity theft in Michigan is related to credit cards, and 18% is classified as phone or utilities fraud, in contrast with the respective national rates of 16% and 10%. The vast majority of identity theft in Michigan occurs in the Detroit metro area, where the identity theft rate of 220.4 complaints per 100,000 area residents is far greater than the statewide rate of 158.1 complaints per 100,000. The incidence of identity theft in Detroit is also one of the highest in the nation.
Fraud as well as identity theft crimes are very costly. In 2015, the Consumer Sentinel Network reported $765.3 million stolen across over 1 million scams. The financial cost of the average successful scam is $1,154. Frauds reported in states with the highest level of identity theft were not necessarily more costly. In fact, the average amount defrauded exceeded the national average in only four of the 10 states.
Most states have implemented measures to protect residents from fraud. For example, in Maryland, which was one of the first states to pass identity theft legislation, credit reports can be frozen by victims of identity theft. In an FTC press release in March, Jessica Rich, director of the FTC’s Bureau of Consumer Protection, said, “Steps like the recent upgrade to IdentityTheft.gov and our leadership of a nationwide initiative to combat unlawful debt collection practices are critical to our ongoing work to protect consumers from these harms.”
To identify the 10 states with the highest incidence of identity theft, 24/7 Wall St. reviewed data for the 2015 calendar year from the FTC’s Sentinel Network Data Book, which compiles the total number of fraud complaints in each state. These complaints are categorized as either identity theft or a second category, which includes all other kinds of fraud. The average amount stolen from victims of fraud also came from the FTC. Fines and penalties for identity theft in each state came from the National Conference of State Legislatures.