Online Banking, Receiving and Paying Bills Online Can Protect Against Identity Theft
SAN FRANCISCO – October 2, 2003 – Javelin Strategy & Research (www.javelinstrategy.com) today released “Online Banking and Bill Paying: New Protection from Identity Theft,” the first quantifiable study of how Internet use can help protect consumers and reduce identity theft. The report concludes that, contrary to popular assumptions, using the Internet can actually help protect consumers and businesses from two of the most common kinds of identity theft: fraudulent opening of a new accounts and unauthorized use of existing accounts. The most significant benefits come from online banking and viewing and paying bills, which can help prevent more than one million cases of identity theft and save consumers and businesses $4.8 billion annually.
According to the Federal Trade Commission, identity theft victimized more than 10 million Americans last year and cost businesses more than $47 billion. The Javelin Strategy & Research report analyzed findings from Federal Trade Commission and United States Postal Service reports, and primary consumer and industry studies by Javelin.
“More private personal content is being sent to mailboxes than ever before, with the average household receiving 20 paper statements and bills per month,” said James Van Dyke, Javelin Strategy & Research. “By receiving and paying bills online, consumers take the information out of their mailbox, and out of the reach of those who would fraudulently open an account or make unauthorized purchases on existing accounts. Businesses that encourage their customers to move to electronic billing and ask them to turn off paper bills are also helping to reduce the costs of fraud.”
Receiving and Paying Bills Online Helps Prevent Identity Theft
By viewing and paying bills and statements online, consumers and businesses eliminate one of the most common means of identity theft – stealing personal information contained in bills, bank statements, and credit cards that are delivered to a person’s mailbox, or in the signed, outgoing check used to pay the paper bill. The information can be more easily obtained in the physical world than via secure sites such as a bank’s Web site.
This significantly reduces the risk of having fraud committed with new accounts that are opened in consumer’s name – which costs an average victim more than 60 hours of personal time to correct and more than $1,100 in out of pocket costs. The benefits to business are even greater. The average cost associated with fraudulent accounts is more than $10,000 per case and $32.9 billion annually.
Additionally, frequent account monitoring is the single greatest step consumers can take to fight identity fraud. Consumers that view and pay their bills and bank online are nearly four times more likely to monitor their transactions frequently than those who wait for paper bills and monthly statements. Despite the millions spent by business on fraud monitoring technology, more than half of the cases are identified by consumers. This earlier detection can reduce identity theft by more than 18 percent, by detecting and reporting fraud before more damage can be done.
Javelin’s New Advice for Online Consumers to Reduce Risk of Identity Fraud
1. Sign up for bill presentment and payment, preferably through a single trusted provider such as a financial institution or portal, where payment information, passwords, settings and monitoring can be consolidated.
2. When comparing sites for viewing e-statements, look for a no-liability guarantee of payment, an easy-to-use site, and extended-hours customer service.
3. Sign up for e-mail based account “alerts”.
4. Request that the paper copies of all statements and bills be “turned off” by your provider. If you print out paper copies, store them safely.
5. View online statements and bills weekly, particularly for financial accounts.
6. Sign up for automatic deposits of any regular payments.
7. Use hard-to-guess unique passwords, change them regularly, and record them in a safe place.
8. Don’t respond to e-mails that ask you to log in or update data. Only log in to secure sites after directly typing and double checking the URL.
9. When buying or selling at auction sites use P-to-P Payments, and take extra precautions with parties that lack a success rating.
10. Avoid transacting with high-risk or unknown online merchants such as those in the adult sector (where fraud is more common).
11. Retrieve paper mail promptly and never place checks in your personal outgoing mailbox.
12. Never give out your Social Security number or other private information unless you have no other option, and avoid divulging such information over the phone.
13. If account activity looks suspicious or important mail is delayed, check with the merchant or biller immediately.
14. If fraud is detected, contact credit bureaus and take advantage of all recourse and protection methods.
15. Destroy pre-approved offers of credit and other private information.
16. Add you name to all available telemarketing deletion lists, and ask callers to place you on their “do not call” list.
17. Don’t discard a computer without thorough deletion of personal data.
18. Photocopy contents of wallet in case of theft.
19. View credit reports at least one per year.
20. If you need more confidence before using bill payment, make your first check out for $1.00, payable to yourself, and see what happens. (Note: Most E-Payments sent to businesses travel electronically, rather than in paper form).
About Javelin Strategy & Research
Javelin Strategy& Research provides advisory services to companies in the financial services, payments, and commerce sectors, to increase the profitability of customer-related technology investments. Founded in 1998, the company’s expertise is based on rigorous methodology, deep industry experience, and a wealth of strategic research data and resources.Javelin provides guidance and insight to technology solution providers in order to increase their competitive advantage. The firm demarcates product and company strategy based on research of customers, markets, competitors, technology, corporate assets and more, in order to produce actionable findings and recommendations.