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ID theft: Where you live makes a difference, study finds

N.Y., Calif and Nevada are among the riskiest for ID theft

February 14, 2007 12:00 PM ET

Computerworld - Faulkton, S.D., has a population of 800 and no crime to speak of. Yet the citizens of this rural town are second only to the people in Floral Park, N.Y., when it comes to being at risk for having their identities stolen.

That's just one of the findings of a study released today by San Diego-based risk management firm ID Analytics Inc., which looked at U.S. identity fraud rates by geography.

Topping the list as the riskiest states for ID theft are New York, California, Nevada and Arizona, while the safest ones are Wyoming, Vermont, Montana and North Dakota. The riskiest 5-digit zip codes for ID theft -- after Floral Park and Faulkton -- are Old Bethpage, N.Y., New York City and Manhasset, N.Y.

The ID Analytics report is based on a study of over 1 million fraud events as indicated by fraudulent applications for credit using stolen identity data. The findings can help pinpoint specific areas where criminals may be operating in an organized fashion, said Stephen Coggeshall, CTO at ID Analytics and the author of the report. "We think it can provide valuable information for a variety of people," including financial institutions, retailers and law enforcement, he said.

The report could also tell consumers "if they live in a high identity fraud area," he said.

The ID Analytics study is so detailed that it can pinpoint specific addresses associated with a high level of identity theft risk, he said. "Whether these are victims or perpetrators of ID theft is not 100% clear," Coggeshall said. But there are "strong indicators" that a majority of these addresses are associated with perpetrators, he said.

The ID Analytics findings are consistent with other studies when it comes to highlighting risky areas, Coggeshall said. However, unlike previous research based largely on consumer victim reports, the ID Analytics study is based on an analysis of attempted fraud using compromised data.

That distinction is important because an overwhelming majority of identity fraud results from the creation of "synthetic" identities rather than "true name" identity theft, an ID Analytics white paper noted. As a result, there is often no consumer victim to report the crime.

The identity-level data elements used for the analysis came from ID Analytics' customers in the financial services, retail, health care, telecommunications and other industries. The data included names, addresses and Social Security numbers culled from account applications and other transactions monitored by ID Analytics for fraudulent activity.

Fraud rates were calculated by dividing the total number of reported identity fraud incidents by the number of applications to credit grantors during 2005 through June 2006, Coggeshall said. The approach allowed for a better comparison of fraud rates across areas with different population densities, he said.

"We do see stability across time," Coggeshall said.

States that are consistently risky tend to be West coast states such as California, Nevada, Arizona and Oregon, as well New York, Texas, Florida, Illinois, Michigan, Alaska and Hawaii. The least risky states tend to be upper Midwestern ones such as Montana, Idaho, Wyoming and South Dakota, as well as New England states such as New Hampshire, Vermont and Massachusetts.

Read more about Security in Computerworld's Security Topic Center.



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