Is identity theft going DOWN?

Maybe you have read some headlines recently that studies show identity theft is decreasing.

First let me say, this study was completed on the heels of one of the biggest data breaches with the widest ripple effect in recent history..... TJ Maxx.

The Javelin study was sponsored by Visa, Wells Fargo and electronic billing company CheckFree.

Do you suppose they have an interest in avoiding further regulation?

The Javelin Study was just 1 of 3 major studies that came out this month that indicate that identity theft is on the decline. Maybe now we can stop guarding our Social Security numbers like state secrets and sell our shredders on eBay. NOT.

It's hard to gauge the reliability of any of these reports.

1) Javelin Strategy & Research, in a phone survey of 5,000 people, found that 3.7 percent had their identity stolen in 2006, down from 4 percent in 2005 and 4.7 percent in 2003.

2) Then the Federal Trade Commission released its report, which showed that ID theft declined slightly last year from 2005, though it remained the top fraud complaint for the seventh consecutive year. The FTC study, based on complaints filed with the commission. The FTC study, based on complaints filed with the commission, ranked Florida fifth among states in ID thefts per capita. South Florida, encompassing Miami to West Palm Beach, was 37th among metropolitan areas.

3) A report released Wednesday by ID Analytics, a San Diego-based consultant, showed New York, California, Nevada and Arizona as the states with the highest risks of ID fraud. New York City, Detroit, Los Angeles and Little Rock, Ark., had the highest rates among cities. Neither Florida nor any cities in the state ranked in the top 10.

As for the FTC study, the sample base was large and the commission has been consistent with its methodology. But how meaningful is it to analyze only complaints made to the FTC? Most victims report ID theft to local police or not at all. (upwards of 60% goes Unreported)

Even if the studies were accurate, they would simply reflect the reality that anything measured by a number can peak only once. Just like real estate prices and the stock market, ID theft can't go up forever. Perhaps it already hit a historic high and is now leveling off.

Frankly, it shouldn't matter. The problem, regardless of whether it's a little bigger or a little smaller than it was a year ago, remains serious.

People need to protect what they can NOT prevent. That is why they need you.

If we read a report that crime is down, we don't start leaving our car doors open and our wallets lying around in public places. We didn't stop consuming vitamin C once scurvy was under control. So we shouldn't let our guard down now, either.

But is it possible we're too worried about ID theft? Is it possible the risks have been overhyped in the media? It won't come as a shock to anyone who has followed recent coverage of Anna Nicole Smith's death and the diaper-wearing astronaut lady, but the answer is yes, it's possible.
ID thefts described in the media -- such as the brazen use of someone's identity to have medical procedures provided -- accurately show how devastating the crime can be to its victims.

What does all this mean for consumers? Don't ditch your shredder just yet.