Mar 30 2009 |  |
On March 17, Shane Gross wrote an interesting article in which he looked at some of the statistics behind identity theft in Canada. In the course of writing this article, Shane referenced a wonderful report entitled, "Measuring Identity Theft in Canada: 2008 Consumer Survey" written by Susan Sproule and Norm Archer of McMaster University's eBusiness Research Centre.
Since Sunburn Gross and I come from different backgrounds, it is no surprise that we both focus on slightly different aspects of the report. While Shane focused more upon the raw numbers, I got hung up on a few very interesting sections.
First, when my friends and I talk about SmartSwipe, the most common objection I hear is that 'my bank pays me back when my credit card number is used fraudulently'. While that is true on face value, the Sproule/Archer report demonstrates that the numbers behind identity theft do not back up that assertion. Check out this passage from the executive summary:
According to the results of this survey, 6.5% of Canadian adults, or almost 1.7 million people, were the victim of some kind of identity fraud in the last year. These victims spent over 20 million hours and more than $150 million to resolve problems associated with these frauds.
More than half of these frauds involved nothing more than unauthorized purchases made with credit cards. Consumers rarely pay the costs of such frauds. If we eliminate credit card fraud from the incidence rate and costs quoted above, the number of victims is reduced to 700,000 but they still spend 12 million hours and more than $110 million dollars of their own money to resolve these other problems.
Let's do some math (math is cool):
Identity Theft in total affected 1.7 million Canadians and cost them 20 million hours and greater than $150 million. But, if you remove credit card fraud from that equation, only 700,000 Canadians were affected and faced a cost of 12 million hours and $110 million. If you take the difference between these two figures, you see that credit card fraud (the most common form of identity theft) affected 1.0 million Canadians and cost them 8 million hours and approximately $40 million. Let's take this one step further - if those numbers are true (and, based upon my reading, it looks like this study's methodology was almost perfect), it means that the average Canadian victim of credit card fraud had to spend 8 hours and $40 of their own money to combat the affects of credit card fraud!
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written by shane G, March 31, 2009
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