Javelin Study Finds Identity Fraud Reached New High in 2009, but Consumers are Fighting Back

Identity Fraud Affected 11 Million Americans in 2009; Proactive Measures by Financial Institutions, Businesses and Consumers Helped Decrease Costs; Increase in Prosecutions and Convictions

SAN FRANCISCO, February 10 - The 2010 Identity Fraud Survey Report - released today by Javelin
Strategy & Research (www.javelinstrategy.com/) - found that the number
of identity fraud victims in the United States increased 12 percent to 11.1
million adults in 2009, while the total annual fraud amount increased by 12.5
percent to US$54 billion(1). The report found that protection of data by
consumers and businesses and enlisting assistance in resolution are helping
consumers and businesses resolve fraud more quickly, and are also reducing or
eliminating costs for the consumer. Average fraud resolution time dropped 30
percent to 21 hours, and nearly half of new victims file police reports,
resulting in double the reported arrests, triple the prosecutions, and double
the percentage of convictions in 2009.

(Photo: www.newscom.com/cgi-bin/prnh/20100210/NY52391 )

Now in its seventh consecutive year, the comprehensive identity fraud
survey report is independently produced by Javelin Strategy & Research and
co-sponsored by leading companies in financial services and identity fraud
prevention technology and resolution. Co-sponsors in 2009 include Fiserv,
Inc., Intersections Inc., Wells Fargo & Company and ITAC, the Identity Theft
Assistance Center. The survey is the nation's longest-running study of
identity fraud, with more than 29,000 U.S. respondents over the past seven
years. Identity fraud is defined as the unauthorized use of another person's
personal information to achieve illicit financial gain. In November 2009,
Javelin conducted telephone interviews with 5,000 U.S. adults to identify and
track the methods fraudsters used, the impact of fraud on Americans and how
these findings can help consumers most effectively avoid becoming victims of
fraud.

"The 2010 Identity Fraud Survey Report shows that fraud increased for the
second straight year and is at the highest rate since Javelin began this
report in 2003(2)," James Van Dyke, president and founder, Javelin Strategy &
Research. "The good news is consumers are getting more aggressive in
monitoring, detecting and preventing fraud with the help of technology and
partnerships with financial institutions, government agencies and resolution
services. Through IDSafety.net and our free consumer report, Javelin and our
co-sponsor partners are working to educate consumers and provide guidelines
and tips to help them safeguard their personal information."

Other findings in this year's report reinforce the trend that fraudsters
are becoming increasingly savvy with technology and are using personal
information stolen in data breaches to open new accounts or to make changes
to existing non-card accounts. Financial institutions and businesses are
countering this by minimizing the use of Social Security numbers in account
information and more proactively monitoring and notifying customers of
possible fraudulent activity. While consumers are monitoring their accounts
more frequently using technologies such as online banking and mobile alerts,
consumer education on protection and prevention measures such as keeping
anti-virus software up to date will continue to be important.

Key Survey Findings:

    - Fraud is Up, but Consumer Costs and Resolution Hours Drop - The number
      of identity fraud victims increased by 12 percent over 2008, reaching
      the highest level since the survey started in 2003. Javelin believes
      this may be due to the economic downturn, when historically, higher
      rates of fraud occur. However, during 2009 there was a drop in fraud
      costs per victim and a decrease in time to resolution, thanks to
      increased consumer awareness, assistance provided by financial
      institutions consumer support organizations, and law enforcement.

    - Increase in New Account Fraud - Identity fraud that resulted from
      fraudsters opening new accounts with stolen information increased in
      2009. The number of fraudulent new credit card accounts increased to 39
      percent of all identity fraud victims, up from 33 percent in 2008. New
      online accounts opened fraudulently more than doubled over the previous
      year, and the number of new e-mail payment accounts increased 12
      percent. This year for the first time, the survey asked about new
      mobile phone account fraud and 29 percent of new accounts fraud victims
      reported new mobile phone accounts were fraudulently opened.

    - Data Breaches Across Various Industries Continue to Compromise Personal
      Information - Identification most likely to be compromised in a data
      breach continues to be Full Name (63 percent) and Physical Address (37
      percent). With a year-over-year increase of 4 percent, Health Insurance
      Information is increasingly targeted. The percentage of Social Security
      numbers compromised decreased to 32 percent from 38 percent in 2008.

    - Fraudsters Target Existing Credit Cards - 75 percent of existing card
      fraud incidents came from credit cards, an increase of 12 percent over
      2008. In contrast, existing debit card fraud incidents decreased two
      percent and represented 33 percent of total existing card fraud in
      2009.

    - Proactive Consumers are Catching Thieves - Half of all victims filed a
      police report, resulting in more arrests and convictions. Victims
      became more vigilant in reporting identity fraud, and reported this
      resulted in an arrest rate twice last year's rate, and a prosecution
      rate that tripled compared to 2008. These findings indicate greater
      success using information provided by consumers, banks and credit card
      providers to detect, catch and convict criminals.

    - 18 to 24 Year Olds are Slowest to Detect Fraud - Millennials (consumers
      aged 18 to 24 years old) take nearly twice as many days to detect
      fraud, compared to other age groups, and thus are fraud victims for
      longer periods of time. Millennials were found to be the less likely to
      monitor accounts regularly and the least likely group to take advantage
      of monitoring programs offered by financial institutions. However,
      Millennials were the most likely group to take action such as switching
      primary banks or switching forms of payment.

    - Small Business Should Exercise Caution - Small business owners suffered
      identity fraud at one-and-a-half times the rate of other adults. This
      appears to be due to the fact that small office / home office business
      owners use personal accounts when making business transactions and make
      more transactions than typical adults.

Criminals are conducting more identity fraud, but consumer costs and
resolution times are down and online and mobile tools are helping

Identity fraud increased in 2009 and the number of fraud victims in the
U.S. grew to 4.8(3) percent of the population, adding up to a projected total
of US$54 billion in crime.

Financial institutions, businesses and government agencies are helping
prevent fraud, protect consumer identities and respond to fraud incidents. As
a result, consumers are benefiting. Banks are continually providing more
behind-the-scenes customer and analytic tools for safer electronic and
traditional banking. They are investing in identity fraud monitoring,
intelligent fraud engines to detect account access and payment anomalies, and
resolution and education services, typically offering these services free to
customers. Banks are also increasingly offering mobile banking solutions,
which allow monitoring and alerts in near-real-time that proactively notify
customers when account activity and possible fraud occurs. These partnerships
and increased activism on the behalf of consumers resulted in consumer out of
pocket costs being at an all-time low of US$373 in 2009. Consumer out of
pocket costs refer to unreimbursed loses, legal fees and actual lost wages.
The typical out of pocket cost for a consumer fraud victim is zero, due to
guarantees provided by financial institutions.

Technology is empowering consumers against fraudsters, but consumers need
to take precautions

Electronic account monitoring and services provided by financial
institutions through partnerships are allowing consumers to become
increasingly vigilant when it comes to detecting and resolving identity
fraud. Consumers are adopting best practices in safeguarding their personal
and private information by reviewing electronic statements and fraud alerts
sent to e-mail accounts and mobile devices, and not responding to e-mail
requests for personal information such as "phishing." Monitoring for
fraudulent activities with a mobile device allows consumers to review and
report identity fraud in near-real-time, which can result in lower victim
costs and faster detection times.

Millennials lead all age groups in using technology to resolve identity
fraud, but only after a fraudulent incident has occurred. They are most
likely to switch primary banks or switch forms of payment after fraud has
been committed. They widely use online banking and bill pay and are quick to
adopt mobile banking.

While technology is helping consumers to monitor, detect and resolve
identity fraud, consumers should be vigilant about safeguarding their
personal information online and offline. Consumers can leverage technologies
that are available through their financial institutions to help protect their
information. Consumers should follow best practices and change passwords
regularly, refrain from sharing passwords or other account information, lock
computers and safeguard personal information, use a paper shredder to destroy
paper account documents, keep anti-virus software up to date on their
personal computers, and use discretion when sharing information on e-commerce
sites. Mobile banking and mobile commerce are not as yet widely susceptible
to fraud, however consumers should apply the same practices to those channels
as well.

Consumers can play a key role in preventing, detecting and resolving
identity fraud committed against them

This year's Identity Fraud Report found that more consumers are pursuing
legal action following identity fraud, with nearly 50 percent of all victims
filing police reports. Empowered consumers are leading to more arrests,
prosecutions and convictions. Most consumers are actively monitoring accounts
for suspicious activity and fraud and are acting faster when fraud is
detected.

All consumers need to better secure their private information.
Perpetrators who are known to victims committed more non-card and new
accounts fraud in 2009. Reasons for this include theft of physical documents
from places such as desks and mailboxes, sharing computers with friends and
family, storing online account passwords and using auto-login, and using
simple, guessable passwords.

Consumer Recommendations for Prevention, Detection and Resolution(TM) of
Identity Fraud

    1. Prevent Criminal Access by Protecting your Paper Documents

       - Keep sensitive information from prying eyes. Request electronic
         statements, use direct deposit, and don't put checks in an unlocked
         mailbox. When your Social Security number is requested as an
         identifier in paper documents, ask if you can provide alternate
         information. At home or work, secure your personal and financial
         records in a locked storage device-last year, at least 13% of all
         identity crimes were committed by someone previously known to the
         victim. Shred any sensitive paper documents.

    2. Prevent High-Tech Criminal Access

       - Install anti-virus software on your computer and keep it updated
         along with your applications and operating system.
       - Secure your electronic personal and financial records on your
         computer behind a password.
       - Never respond to requests for personal or account information online
         (or over the phone). Watch out for convincing imitations of banks,
         card companies, charities and government agencies in the mail, on
         the Web, over the phone, or on your mobile device. Use legitimate
         sources to contact financial institutions, such as an official
         website or the telephone number listed on statements and the back of
         bank or credit cards.
       - Don't publish your birth date, mother's maiden name, pet's name or
         other identifying and personal information on social media websites.
       - Use unique and hard-to-guess passwords, including for your wireless
         Internet connection, and don't access secure Web sites using public
         Wi-Fi.
       - Install security patches and software updates as soon as they are
         released by verified sources. For phones, turn off Bluetooth and
         Wi-Fi if they are not being used.

    3. Detect Unauthorized Activity in Existing Accounts

       - Monitor current available bank and credit card account balances
         at least weekly, via online, mobile, ATM, or touch-tone banking.
         Sign up for alerts to be sent to your mobile phone or e-mail
         account. Javelin's study of 5,000 adults finds 43 percent of all
         reported identity fraud cases are spotted by consumers self-
         monitoring their accounts and those who use more timely electronic
         methods to detect fraud experience lower average out-of-pocket
         costs.

    4. Detect Fraudulent Establishment of New Accounts.

       - Monitor your credit reports and non credit account information to
         spot unauthorized activity. Free credit reports from each of the
         three major credit bureaus are available each year through
         annualcreditreport.com or +1-877-322-8228. Optional fee-based
         services, such as more extensive monitoring of credit information,
         personal identity records and Social Security numbers offer timely
         and thorough protection.
       - If you receive a letter notifying you that your private records were
         involved in a data breach, 1) confirm the letter is legitimate 2)
         take advantage of any free protection services that are offered and
         3) place a fraud alert on your credit report. A fraud alert requires
         lenders to make sure it is actually you applying for credit. One in
         four letters are followed by actual fraud, yet many who are alerted
         fail to take action.

    5. Resolve Identity Fraud Completely

       - Work through your bank, credit union or protection services provider
         to report problems immediately and take advantage of your financial
         provider's offers of loss protections (all large financial
         institutions offer zero-liability for debit and credit cards and
         many provide the same protection for online banking and bill-pay).

For Additional Educational Tips, Consumers Should Visit:

    - Fiserv
    www.ebillplace.com/staysafe

    - Intersections Inc.
    www.identityguard.com/consumer-tools

    - Wells Fargo Fraud Information Center
    https://www.wellsfargo.com/privacy_security/fraud/

    - ITAC, Identity Theft Assistance Center
    www.identitytheftassistance.org/

For the consumer report, please visit: www.IDSafety.net

To register for an interactive webinar detailing the report's findings,
please visit: https://www1.gotomeeting.com/register/115681009

About Javelin Strategy & Research

Javelin is the leading independent provider of quantitative and
qualitative research focused exclusively on financial services topics. Based
on the most rigorous statistical methodologies, Javelin conducts in-depth
primary research studies to pinpoint dynamic risks and opportunities. Javelin
helps its clients achieve their initiatives through three service offerings,
including syndicated research subscriptions, custom research projects and
strategic consulting. Javelin's client list includes some of the largest
financial institutions, technology enterprises and security firms.

(1) Past years dollars figures have been adjusted for inflation using the
Consumer Price Index (CPI-U) issued by the Bureau of Labor Statistics
www.bls.gov/cpi/cpid0912.pdf

(2) Based on U.S. population estimates (age 18 and over),
www.census.gov/popest/estimates.php

(3) Based on U.S. population estimates (age 18 and over),
www.census.gov/popest/estimates.php

    Media Contact:                     All Additional Inquiries:
    --------------                     -------------------------
    Matt Pennacchio                    Elizabeth Travers
    Javelin@ruderfinn.com              etravers@javelinstrategy.com
    +1-212-715-1613                    +1-925-225-9100 ext. 31
    Twitter: @IDFraudReport

Matt Pennacchio, +1-212-715-1613, Javelin at ruderfinn.com, Twitter: at IDFraudReport; All Additional Inquiries: Elizabeth Travers, +1-925-225-9100 ext. 31, etravers at javelinstrategy.com