Is identity theft still on your radar? It definitely should be.
Last year, it claimed the top spot in U.S. fraud cases, contributing significantly to the staggering $10 billion lost to fraud, according to the data collected by FTC’s Consumer Sentinel Network.
And there’s no sign of it slowing down. In fact, early data for this year indicates a 16% jump in cases from the last quarter of 2023.
The cases are rising as the methods for stealing identities or creating synthetic ones have evolved. Scammers are now harnessing advanced tech to craft slick phishing emails and produce shockingly convincing, deepfake audio and visuals.
Meanwhile, the dark web has become a one-stop shop for stolen identities, bolstered by tools like fraud GPT that masterfully mix real and fake data to craft new personas.
To outsmart these criminals, fraud investigators must continuously refine their strategies. So, what’s better than examining the alarming figures of 2023’s identity fraud to understand the evolving tactics? Will discuss that, but first, let’s look at the hotspots: the top ten US states leading last year’s identity theft reports.
Top Ten States with the Highest Number of ID Theft Cases Reported in 2023
| Rank | State | Number Of Cases |
| 1 | California | 119,944 |
| 2 | Texas | 101,011 |
| 3 | Florida | 93,562 |
| 4 | New York | 51,506 |
| 5 | Georgia | 48,614 |
| 6 | Pennsylvania | 40,791 |
| 7 | Illinois | 39,319 |
| 8 | Ohio | 34,655 |
| 9 | New Jersey | 26,138 |
| 10 | North Carolina | 25,149 |
Checkout the 9 Most Scandalous Fraud Cases of 2023!
6 Leading Types of Identity Thefts in the USA in 2023
Among the various types of identity theft, six stood out as particularly prevalent in 2023, each with unique methods and impacts on victims. In this section, we will delve into the total number of cases for each type of identity theft, the mechanisms behind the thefts, and real-life examples to illustrate their impact.
1. Credit Card Identity Theft
Total Cases Reported in 2023: 416,630
Credit card scams have become the most prevalent type of identity theft in the USA, driven by the widespread use of credit cards for online and in-store purchases.
Mechanisms of Theft:
- Stolen credit card data is easily accessible on dark web marketplaces, making it simple for criminals to obtain and misuse.
- Advanced AI-driven phishing schemes can create highly convincing fake websites and emails, tricking users into divulging their credit card details. These sophisticated attacks contribute to the growing number of imposter scams, which accounted for nearly $2.7 billion in losses.
- The increase in online shopping and digital payments provides more opportunities for thieves to exploit vulnerabilities in transaction processes.
Case Example:
Representative George Santos, a first-term Republican congressman, was charged with multiple counts of credit card fraud. He allegedly stole the identities and credit card details of donors for unauthorized transactions, created a fake $500,000 campaign loan, and funneled money into it. Santos faces a 23-count indictment, including wire fraud, identity theft, and credit card fraud.
2. Other Identity Theft
Total Cases Reported in 2023: 260,802
Other types of identity theft encompass a variety of fraudulent activities, including email and social media scams, credit report and insurance scams, medical services and online shopping scams.
Mechanisms of Theft:
- Fraudsters create fake e-commerce websites or fraudulent online shopping offers to trick consumers into purchasing goods that never arrive. These scams alone accounted for 44% of fraud losses in early 2023.
- The rise in telehealth services and electronic health records has made it easier for fraudsters to steal personal information and use it to receive medical services, prescription drugs, or treatments under someone else’s name.
- Criminals use stolen identities to file false insurance claims, resulting in billions of dollars in fraudulent payouts.
Case Example:
Oren David Sela, from San Fernando Valley, stole the identities of Beverly Hills residents by stealing their mail and packages, opening fraudulent bank accounts and transferring $2.6 million. Charged with bank fraud, identity theft, possession of unauthorized access devices, identity documents, and stolen mail, Sela faces multiple federal counts for his actions.
3. Loan or Lease
Total Cases Reported in 2023: 149,799
With the increasing interconnectedness of financial systems, loan and lease identity theft is increasing, exploiting the foundations of credit and lending institutions.
Mechanisms of Theft:
- Many lenders fail to implement robust verification processes, making it easier for thieves to use stolen identities.
- Criminals create synthetic identities using a combination of real and fabricated information to apply for loans and leases, making detection challenging for lenders.
- The emergence of FaaS platforms allows criminals to purchase tools and services to execute fraud more efficiently. These platforms use AI to generate convincing applications and automate social engineering scripts, enabling large-scale attacks on financial institutions.
- The shift towards digital loan applications has made it easier for fraudsters to submit fraudulent applications remotely.
Case Example:
Steeve Jean from Lynn used a stolen identity to rent an apartment and defaulted on over $8,000. While serving a state prison sentence, he fraudulently applied for $41,666 in federal loans. Charged with wire fraud, identity theft, and unauthorized Social Security use, Jean received a 44-month prison sentence, three years of supervised release, and $50,009 in restitution.
4. Bank Account
Total Cases Reported in 2023: 136,841
The shift towards online and mobile banking has provided fraudsters with more avenues to exploit vulnerabilities in digital banking systems.
Mechanisms of Theft:
- There has been an increase in fraud at brick-and-mortar bank locations. Criminals exploit the helpful nature of branch employees to open accounts, deposit bad checks, and access other financial products.
- With the rise in popularity of peer-to-peer (P2P) payment tools like Zelle, Venmo, and Cash App, fraudsters increasingly target these systems to make payments for non-existent goods or services or to gain access credentials.
- Scammers place malicious QR codes in public places, which, when scanned, lead to phishing sites or download malware that compromises the user’s bank account information.
Case Example:
Marc Lazarre and his associates, Fritzgerald Steide, Mohammed Khan, and Andrea Lewis, used stolen personal information to open fraudulent bank accounts from September 2021 to October 2022. They transferred funds and cashed checks using fake IDs. Indicted, they face up to 30 years in prison for bank fraud and additional penalties for identity theft.
Also Read: Fraud Analytics in Banking: Best Practices for Prevention and Investigation
5. Government Documents and Benefits
Total Cases Reported in 2023: 97,031
Government documents or benefits fraud surged by 68% in 2023, following an 85% decline in 2022.
Mechanisms of Theft:
- Criminals place skimming devices on ATMs and point-of-sale terminals to capture EBT card information, allowing them to create clones and steal benefits.
- The creation of high-quality counterfeit identification documents allows fraudsters to impersonate victims and access government benefits using fake IDs.
- Personal information from data breaches is exploited to file fraudulent claims for unemployment, SNAP benefits, and other government aid.
Case Example:
Seven defendants, including Christopher Peeples and Khalil Bey-Muhammad, ran a million-dollar identity theft and fraud scheme from 2020 to 2022. They used stolen information to obtain government benefits, hijacked bank accounts, and performed SIM swapping. Their actions caused over $1 million in losses and significantly harmed victims. One victim’s credit score dropped by 200 points due to fraudulent accounts.
6. Employment or Tax- Related
Total Cases Reported in 2023: 89,492
Employment and tax-related identity theft target the vulnerabilities in payroll and tax filing processes.
Mechanisms of Theft:
- Stolen or lost identifying documents, such as Social Security cards or driver’s licenses, are used to establish false identities and gain employment.
- Advanced cyberattacks, including Zero Day and supply chain attacks, have made it easier for criminals to obtain the personal information needed to commit tax-related fraud.
- Cybercriminals gain access to company databases containing sensitive employee information, which is then used for fraudulent purposes.
Case Example:
Abraham Yusuff and six associates claimed over $111 million in tax refunds using stolen identities from 2018 to 2021. They filed 371 false returns and laundered money through prepaid cards, money orders, designer items, and cars. Charged with mail and wire fraud, identity theft, and money laundering, they face up to 20 years in prison.
Checkout the top 10 most reported fraud categories in the U.S. in 2023!
Using ScanWriter to Combat Identity Theft!
Identity theft, encompassing everything from credit card fraud to government benefits schemes, is becoming increasingly sophisticated. As fraudsters continuously refine their methods, it’s crucial that our investigative techniques not only match their pace but also anticipate their next moves.
Success in these investigations hinges on our ability to manage and analyze large volumes of data with precision and efficiency. This is precisely where ScanWriter excels, equipping us with the robust tools necessary to confront and overcome modern fraud challenges effectively.
Here’s how it enhances fraud investigations through:
- Complex Pattern Detection: Identifies patterns and anomalies in large datasets for early fraud detection.
- Streamlined Processes: Automates data normalization, capture, visualization and management, boosting efficiency.
- Software Integration: Works with popular accounting software like Excel, QuickBooks, and Microsoft Power BI.
- Enhanced Accuracy: Captures precise data across 15,000+ bank document formats.
- Reduced Time Investment: Processes over 100 transactions in seconds, allowing more focus on investigations.
- Top-Notch Security: Offers secure on-site deployment to protect against data breaches.
Moreover, if you choose ScanWriter, a support team is always available via phone, live chat, and email. We provide a comprehensive knowledge base and training resources to assist you and resolve any queries without affecting the investigation process.
So what are you waiting for? Sign up for a free demo today to see how ScanWriter can revolutionize your approach to fraud detection and prevention.