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INSURANCE INFORMATION INSTITUTE
Contact: Press Offices
New York: 212-346-5500; media@iii.org
Washington, D.C.: 202-833-1580

NEW YORK, February 23, 2009 — Low tech crimes such as a stolen wallet or purse can put into motion the high tech crime of identity theft, according to the Insurance Information Institute (I.I.I.).

Forty-three percent of all identity fraud cases in the U.S. last year began when a wallet was either lost or stolen, and 13 percent of those cases were attributable to a ‘friendly’ theft—instances in which a friend, family member or in-house employee wrongfully accessed private financial data, the newly released by Javelin Strategy & Research found. Javelin’s survey also revealed that during an economic downturn thieves are more likely to use identifying documents to impersonate a victim, steal from bank accounts, establish phony insurance policies, or open unauthorized credit card accounts.

Other ways that criminals can steal a consumer’s identity include online scams such as "phishing,” in which thieves use email inquiries purporting to be from financial or other online organizations in order to obtain the victim’s private account information illegally. Data breaches involve the unauthorized disclosure of information, usually from a corporate enterprise, that compromises the security, privacy or integrity of their customers’ personally identifiable data.

“To help consumers restore their identity, a number of insurers offer identity theft coverage,” said Mike Barry, vice president, media relations for the I.I.I. “Insurers understand that recovering from an identity fraud scheme can be a costly and time-consuming process.”

Identify theft insurance is usually available as a rider to a home or renters insurance policy. Some insurers offer it as part of the home insurance policy, as an added benefit to the policyholder, Barry pointed out.

Identity theft insurance covers the costs of retaining a fraud specialist to assist and guide policyholders through the process of restoring their identity. Identity theft victims can spend months getting their credit records corrected and may have difficulty getting credit, obtaining loans and, in some cases, even finding employment. Some policies may provide reimbursement for the expenses associated with the identity and credit restoration process, including phone bills, lost wages, notary and certified mailing costs, and sometimes attorney fees (with the prior consent of the insurer).

“Consumers should carefully monitor their bank balances and credit card bills to make sure that they actually made all of the transactions attributed to them,” said Barry. In fact, more than half of all ID fraud victims discovered that their identity had been stolen by monitoring their bank and credit card accounts, the Federal Trade Commission (FTC) has said.

The I.I.I. has the following tips to help protect your identity: