Dark Reading is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Vulnerabilities / Threats

Study: ID Fraud Varies With Victims' Income Level

'Economic divide' may lead businesses to develop more customized defenses for different customer types, Javelin research says

An analysis of a company's identity fraud victims may shed new light on identity thieves' tactics, end user reactions, and strategies for defending the customer, according to a new report published this week.

There are significant differences in the frequency and effectiveness of ID fraud attacks on users in different income brackets, according to a study by Javelin Strategy & Research.

Paradoxically, consumers who make $35,000 or less are hit harder by ID fraud than their higher-income counterparts. Customers who made between $15,000 and $25,000 annually incurred the largest average fraud amounts -- over $6,000 -- of any group in the study. Consumers who made $25,000-$35,000 incurred the largest out-of-pocket costs ($858), and consumers who made less than $15,000 experienced the longest time to resolution (44 hours) of their fraud problems.

"There's a general image out there that fraud hits higher-income users harder, but as we saw in the study, that's not always the case," says Rachel Kim, an analyst at Javelin and author of the study.

High-income victims -- those who make six figures or more -- did report the highest frequency of fraud of any group (7.25 percent had experienced an incident), but their average fraud loss was less than $5,600 and their out-of-pocket costs were the lowest in the study ($210).

Lower-income victims experience more debit card fraud than their high-income counterparts, where higher-income victims reported more credit card fraud (74 percent) than debit card fraud (20 percent).

Victims' reactions to the fraud also varied widely among income brackets, the study says. Lower-income consumers were significantly more likely to change merchants or financial institutions in response to an incident (40 percent to just 12 percent in the high income bracket), and many of them reacted by simply ceasing online banking (60 percent) and e-shopping activity. Higher-income customers, by contrast, increased their use of online services such as credit monitoring and online banking.

"What this says is that rather than making a mass outreach to all customers using the same message, financial institutions and other companies should probably vary their educational efforts in different customer brackets," Kim says. "On the back end, it may mean that you should vary your fraud filtering capabilities with different groups of customers."

For example, in the lower-income bracket, it might be beneficial to launch an educational campaign that brings out the advantages of online banking and encourages them to remain loyal to the company. Higher-income customers may need more coaching on how to use credit monitoring services or reduce the likelihood of targeted attacks.

"Phishers, in particular, are getting better at identifying high-income targets, so that's a trend we expect to continue," Kim says. "We're seeing spear-phishing attacks that are surprisingly convincing, and targeting specific individuals who are highly-placed in the organization," she says. "And these attacks are becoming a lot more convincing -- if you don't know what to look for, you would have no way of knowing they aren't genuine."

Whether their customers are predominantly in the lower-income bracket or higher-income bracket, however, companies should consider varying their educational and defensive strategies for identity theft according to those users' vulnerabilities and likely behavior, Kim advises.

"There are some very significant differences," she says. "It doesn't make sense to lump them all together."

Have a comment on this story? Please click "Discuss" below. If you'd like to contact Dark Reading's editors directly, send us a message.

  • Javelin Strategy and Research

    Tim Wilson is Editor in Chief and co-founder of Dark Reading.com, UBM Tech's online community for information security professionals. He is responsible for managing the site, assigning and editing content, and writing breaking news stories. Wilson has been recognized as one ... View Full Bio

    Comment  | 
    Print  | 
    More Insights
  • Comments
    Newest First  |  Oldest First  |  Threaded View
    Data Leak Week: Billions of Sensitive Files Exposed Online
    Kelly Jackson Higgins, Executive Editor at Dark Reading,  12/10/2019
    Lessons from the NSA: Know Your Assets
    Robert Lemos, Contributing Writer,  12/12/2019
    4 Tips to Run Fast in the Face of Digital Transformation
    Shane Buckley, President & Chief Operating Officer, Gigamon,  12/9/2019
    Register for Dark Reading Newsletters
    White Papers
    Video
    Cartoon
    Current Issue
    The Year in Security: 2019
    This Tech Digest provides a wrap up and overview of the year's top cybersecurity news stories. It was a year of new twists on old threats, with fears of another WannaCry-type worm and of a possible botnet army of Wi-Fi routers. But 2019 also underscored the risk of firmware and trusted security tools harboring dangerous holes that cybercriminals and nation-state hackers could readily abuse. Read more.
    Flash Poll
    Rethinking Enterprise Data Defense
    Rethinking Enterprise Data Defense
    Frustrated with recurring intrusions and breaches, cybersecurity professionals are questioning some of the industrys conventional wisdom. Heres a look at what theyre thinking about.
    Twitter Feed
    Dark Reading - Bug Report
    Bug Report
    Enterprise Vulnerabilities
    From DHS/US-CERT's National Vulnerability Database
    CVE-2019-19807
    PUBLISHED: 2019-12-15
    In the Linux kernel before 5.3.11, sound/core/timer.c has a use-after-free caused by erroneous code refactoring, aka CID-e7af6307a8a5. This is related to snd_timer_open and snd_timer_close_locked. The timeri variable was originally intended to be for a newly created timer instance, but was used for ...
    CVE-2014-8650
    PUBLISHED: 2019-12-15
    python-requests-Kerberos through 0.5 does not handle mutual authentication
    CVE-2014-3536
    PUBLISHED: 2019-12-15
    CFME (CloudForms Management Engine) 5: RHN account information is logged to top_output.log during registration
    CVE-2014-3643
    PUBLISHED: 2019-12-15
    jersey: XXE via parameter entities not disabled by the jersey SAX parser
    CVE-2014-3652
    PUBLISHED: 2019-12-15
    JBoss KeyCloak: Open redirect vulnerability via failure to validate the redirect URL.