The financial risks of identity theft are well known, but often just as troubling is the emotional distress such theft puts on consumers, said experts speaking on the topic at a Federal Trade Commission seminar Wednesday.
Nearly 55 percent of people who have had personal identity information stolen report moderate to severe emotional distress: a rate on par with victims of assaults, said Keith Anderson, a commission economist.
Out-of-pocket losses, in fact, average just $100. The biggest burden consumers face is the anguish of battling red tape, sometimes for weeks, to get new debit cards, credit cards, drivers’ licenses and tax refunds, said Anderson.
“There is a lot of harm that goes beyond dollars,” said Eva Velasquez, CEO of the Identity Theft Resource Center. The emotional distress, she said, can even lead people to suicidal thoughts or self-defeating behaviors—such as delaying the start of college.
“It is something people do not brush off,” Anderson said.
On the bright side, efforts to battle cyber crooks have shown some success. The Internal Revenue Service reports that tax refund theft declined by about half from 2015 to 2016, and it could likely fall again.
IRS officials at the conference attributed some of the success to the agency’s work with banks to suspend suspicious refunds. There are other tax refund theft projects going on between government agencies and the private sector.
“Because of our collaborative efforts, we have raised the bar,” said Todd Egaas, the executive official of the IRS’s Identity Theft Tax Refund Fraud Information Sharing and Analysis Center.
While tax refund theft is down overall, it can still be a financial shock for low income Americans who depend on the money to help get by, said Maureen Ohlhausen, the acting chair of the Federal Trade Commission.
Put all forms of ID theft together and the crime costs millions of individuals and small businesses billions of dollars, said Ohlhausen, who has committed the agency to making a major push in the area.