Identity theft is a pressing concern for Americans, a new AICPA survey found. Half of the 1,005 U.S. adults surveyed said it was at least somewhat likely they would lose money to identity theft in the next year, while over one in five (21%) say they have been the victim of identity theft or attempted identity theft. The vast majority of identity theft victims (93%) said they took steps to minimize the impact of the crime on their finances or to protect their identity afterward.
“There are basic steps people can take right now, before identity theft causes a financial nightmare. Securing your personal information and only providing your Social Security number when it is absolutely necessary are easy steps to take,” Gregory Anton, CPA, CGMA, chair of the AICPA’s National CPA Financial Literacy Commission, said in a news release.
Many people who have suffered identity theft have taken such steps, according to the survey, which was conducted in March by Harris Poll on behalf of the AICPA. Seventy-two percent of them contacted their credit or debit card companies to set up additional protective measures, while 29% put a freeze on their credit reports. Victims of identity theft also appear more wary of electronic transactions. Half (50%) say they have used cash or checks more often as a way of preventing identity theft, while 46% say they have eliminated or decreased the number of online financial transactions they make.
The AICPA’s National CPA Financial Literacy Commission says that consumers can reduce their risk of identity theft by checking their and their children’s credit reports each year, signing up for free identity theft protection offered by their credit and debit card providers, using apps to check their account balances daily, and using strong passwords that they change frequently. Victims of identity theft should immediately report it to the local police department, credit reporting agencies, and the Federal Trade Commission.
Investment fraud is infrequently reported
Nearly one-fifth of survey respondents (19%) said they have been victims of investment fraud. The majority of victims (59%) do not report the crime to authorities, the survey found. Victims frequently said they failed to report it for personal reasons, including that they blamed themselves for the crime (41%), knew the fraudster (27%), or were embarrassed (18%).
One-quarter of investment fraud victims (25%) said they did not report the crime because they did not know who to contact. The AICPA’s National CPA Financial Literacy Commission recommends reporting fraud or suspicious financial activity to the SEC and Financial Industry Regulatory Authority.
“Americans who are victimized by investment fraud or identity theft should alert the proper authorities, regardless of the circumstances,” Anton said. “By reporting the crimes, they are increasing the chance that the scammers will be brought to justice and reducing the risk that they will target others in the future.”
Six percent of survey respondents said they had been the victim of Ponzi and pyramid schemes. Other scams that respondents fell prey to included fraudulent IRS tax return or refund scams, investments with unrealistically high guaranteed returns, collectibles scams, and “get rich quick” seminars (4% of respondents said they had been victims of each), as well as requests for money via email (3%).
Consumers should assess any potential investments carefully to reduce their risk of falling prey to investment fraud, the AICPA’s National CPA Financial Commission says. They should ask plenty of questions and be wary if they are pressured to invest or act quickly, if any aspects of a transaction are not transparent, or if a transaction does not offer a reasonable balance of risk to reward.
“A basic rule for any investment is that if it seems too good to be true—it probably is,” Anton said.
—Courtney L. Vien (cvien@aicpa.org) is an associate editor for the AICPA.
