The number of identity fraud victims in the United States decreased by 28 percent to 8.1 million adults last year -- 3 million fewer victims than in 2009, according to a study published today. But for those victims, out-of-pocket costs rose significantly last year because criminals are shifting toward deeper, more damaging attacks.

According to Javelin Strategy and Research's "2011 Identity Fraud Survey Report," total annual fraud decreased from $56 billion to $37 billion, the smallest amount in the eight years of the study. Yet among the victims, costs actually increased, reflecting a shift toward new account fraud and account takeover, the researcher says.

"Consumers are paying more, both on average and as an aggregate," says James Van Dyke, president and founder of Javelin. "We're seeing more identity theft and less simple card fraud. Instead of just stealing a card number and making a single purchase, we're seeing criminals opening new accounts for loans, credit cards, and other services, and this type of fraud is both more costly and harder to detect."

"I don't think we can look at these survey results and say, 'Whew, everything's getting better,'" says Steven Schwartz, executive vice president for consumer services at Intersections, a provider of identity theft prevention services and co-sponsor of the study. "While card fraud is down, there is a movement toward fraud methods that are significantly more serious." The mean consumer out-of-pocket cost due to identity fraud -- which includes payoff of losses as well as legal fees associated with the crime -- increased 63 percent last year, from $387 in 2009 to $631 per incident in 2010, according to Javelin. New account fraud accounted for $17 billion in losses, while card fraud dropped from $23 billion in 2009 to $14 billion in 2010.

Friendly fraud -- fraud perpetuated by people known to the victim, such as a relative or roommate -- grew 7 percent last year, with consumers between the ages of 25 to 34 most likely to be victims, Javelin says. People in this age group are most likely to have their Social Security number (SSN) stolen -- 41 percent of fraud victims in this group reported theft of their SSN.

The Javelin study found an interesting correlation between retail sales and fraud incidence, with the amount of fraud almost perfectly inversely mirroring retail sales during the past seven years, according to the study. When retail sales have increased, fraud has decreased, which points to economic hardships as an overall contributor to fraudsters committing identity crimes.

"When retail spending is up, identity fraud goes down," says Van Dyke. "When retail sales are down, fraud goes up."

There also is an increasing correlation between the incidence of corporate data breaches and the incidence of consumer identity fraud, according to the Javelin study.

"In 2009, we found that consumers who'd received a letter warning them of a corporate data breach were four times more likely to be victims of identity fraud than those who didn't," Van Dyke says. "In 2010, that figure rose -- people who received a letter were six to seven times more likely to be victims. What that tells you is that if you receive one of those letters, it's a call to action -- a lot of people see them and they think that everything's been taken care of, but it's actually a sign that they should be more vigilant."

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