The number of fraud victims is dramatically increasing, indicating that consumers and the payments industry as a whole have to become more vigilant in their security, new research says.

However, while the number of identity fraud victims rose 4%, to 13.1 million, in the U.S. in 2013 compared to 2012, the cost of those fraud incidents decreased by 17%, to $18 billion, indicating quicker responses to those threats, according to Javelin Strategy & Research's annual 2014 Identity Fraud study.

"I believe we have had blinders on, collectively, as consumers, financial institutions or the retail industry to the fact that data breaches lead to identity fraud," says report author Al Pascual, Javelin senior analyst and fraud expert.

Javelin produced the study with consumer fraud and prevention company Intersections Inc.

In the past 11 years, Javelin has surveyed more than 53,800 respondents. The number of fraud victims in 2013 is the highest number Javelin says it has reported since beginning the survey.

Account takeover fraud accounted for 28% of all identity fraud, and fraudsters are increasingly turning to eBay, PayPal and Amazon with stolen information to make card-not-present purchases, the study says.

"It is sheer folly to ignore the relationship between data breaches and suffering fraud," Pascual says. When Javelin first started its fraud survey, the number of consumers who suffered fraud because their data was stolen in a breach was about one in every nine, Pascual says. Today, the number is one in three.

The fact that the amount of money lost through fraud has decreased indicates that progress is being made to thwart fraud, Pascual says. The highest cost total was $48 billion in 2004.

Even though consumers are not able to prevent data breaches at retailers, there are many things consumers can do to protect themselves from fraud, says Steven Schwartz, executive vice president and president of Identity Guard for Intersections, Inc.

"People still like paper statements, but it's best to have an online account so you can check it often," Schwartz says. By monitoring an account online, a consumer would quickly spot fraudulent charges.

"Good password habits remain a key as well," Schwartz says. "People tend to use only one or two passwords for multiple accounts."

The study indicates that consumers who have a different password for every account have lower chance of suffering a fraud incident.

The current numbers do not point to a sudden "perfect storm" for fraud occurrence, Pascual says. "It's just the way it is now."

Fraud remains a difficult challenge mainly because those who make up the payments ecosystem and retail sectors can be "an antagonistic set of players," Pascual says.

"All of these players need to agree and be on the same page to face this challenge," he adds.

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