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Is Identity Theft a Bigger Threat Offline vs Online?

Posted on May 9, 2008 by Tom Fragala

From Javelin Strategy:

We are not saying (online access and data breaches) are not significant factors,” said James Van Dyke, Javelin’s president and founder. “But the point is that it has really been overblown. I think it is to the detriment of consumers to focus exclusively on these electronic methods of communication. Criminal don’t have a (bias) toward technology. They will use any channel that works.”

My first thought is to ask what does the empirical data say? Let's see what our tax dollars bought us. I opened my copy of the FTC 2006 Identity Theft Survey Report (yes, that's the most recent). See the chart (click for full-size). 56% of respondents did not know how data was taken. For the remaining 44% here's the breakdown as I see it

• Offline: 16% know thief personally, 5% from wallet, 2% from the mail
• Online: 1% Hacking into computer, 1% Phishing.
• Unsure: 7% Some other way, 7% purchase or other transaction*, company that had information 5%*.

* These two categories are questionable, as it's difficult to determine exactly what is meant.

As you can see, the data is difficult to categorize. But it's pretty clear that offline is simply more prevalent than pure online. However, you could argue that there are vast numbers of online thefts that go unreported and so fall under the "don't now how info was taken" 56%. I certainly think the data backs up Javelin's assertion that one shouldn't blow the online threat out of proportion. From personal experience, offline is what has nailed me on more than one occasion.

Take away: protect yourself offline

1. Protect your mailbox: lock it or stop account statements, pre-approved offers and "convenience" checks
2. Protect your personal belongings: remove unnecessary items from wallet/purse, lock away your check book, protect sensitive documents at home (anything with SSN or account numbers).

Frankly, most people don't go to these lengths.