More consumers than ever before are actively monitoring their credit and financial accounts for suspicious activity and fraud and are acting faster when identity theft is detected.

More than ever before, consumers and businesses are investing time and money in identity theft protection, the latest survey by Javelin Strategy and Research shows. A survey of consumers and businesses conducted in November, 2009 showed that many consumers are monitoring their accounts more frequently using technologies such as on-line banking, mobile alerts and identity theft protection services. Increasingly, efforts by consumers, businesses and government agencies to safeguard sensitive personal and financial information have helped in resolving identity theft cases more quickly and have resulted in an overall reduction of the costs of identity theft.

With the exception of consumers aged 18 – 24, many consumers are found to be more likely to monitor their accounts regularly, to take advantage of identity theft protection programs offered by financial institutions and to install anti-virus or anti-malware software on their home computers.

Many organizations, especially banks and financial institutions have started offering fraud monitoring services, which can sometimes detect account access and payment anomalies, as well as dispute resolution and identity theft education programs. The one glaring exception identified by the study are small businesses. The survey found that small business owners suffered identity fraud at one-and-a-half times the rate of other adults. This appears to be due to the fact that small or home office-based business owners tend to use personal financial accounts for business transactions and often make many more transactions than typical adults. Small businesses may not have the financial or other resources available to focus on preventing identity fraud or investing in identity theft protection programs and software.

Without a doubt, consumer education on identity theft protection and prevention measures such as keeping anti-virus software up to date will continue to be important. Many banks have offered customers more identity theft protection tools to safeguard electronic and traditional banking. Financial institutions are increasingly investing in identity fraud protection and monitoring software to detect account access and payment anomalies, as well as in consumer education efforts and customer complaint resolution services.

The 2010 Identity Fraud Survey Report was conducted using telephone interviews with more than 5,000 U.S. consumers to identify and track the methods used by criminals and the impact of identity theft on American consumers and businesses. Almost 4,800 U.S. adults, including 487 victims of identity theft, were surveyed.

Small business owners suffered identity fraud at one-and-a-half times the rate of other adults in 2009, according to a study released in February by Javelin Strategy & Research. It seems that, due to the nature of small business – most of the work is done by a small number of people – often just one, the owner. It appears from the research that the susceptibility of small business to identity fraud may be attributed to the fact that small business owners often use personal accounts when making business transactions (and vice-versa) and make a larger number of transactions than typical adults. Since small businesses rarely employ a compliance department or on-site legal counsel to monitor its operations on a regular basis, incidents of identity fraud can sometimes go undiscovered for a longer period of time than for individuals or more complex, larger organizations.

The 2010 Identity Fraud Survey Report identified the information most likely to be accessed by identity thieves as:

• Full Name
• Physical Address
• Credit and Debit Card Information
• Health Insurance Information
• Social Security numbers

identity fraud are increasingly using stolen information to open new credit card accounts, on-line and e-mail payment accounts and cell-phone accounts.

Now for the good news.

Increased vigilance by consumers, businesses and government agencies appear to be having an impact on the problem. Many organizations, especially banks and financial institutions have started offering fraud monitoring services, which can sometimes detect account access and payment anomalies, as well as dispute resolution and identity fraud education programs, in most cases offering these services free to customers. Mobile banking solutions allow account monitoring, alerting customers in near-real-time of account activity and possible fraud. These partnerships and increased activism on the behalf of consumers resulted in consumer out of pocket costs dropping to an all-time low of $373 in 2009.

James Van Dyke, president and founder of Javelin Strategy & Research commented that, “… consumers are getting more aggressive in monitoring, detecting and preventing fraud with the help of technology and partnerships with financial institutions, government agencies and resolution services.”

In November 2009, Javelin Strategy and Research conducted telephone interviews with more than 5,000 U.S. consumers to identify and track the methods used by criminals and the impact of identity fraud on American consumers and businesses. Almost 4,800 U.S. adults, including 487 victims of identity fraud, were surveyed via a 50-question phone interview to gain insight into this crime, its effects on its victims, and how the survey findings can help consumers most effectively avoid becoming victims of identity fraud. The survey has been conducted each year since 2003.