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June 10, 2013

What Do the Elderly and Military Personnel Have in Common?

I recently took close notice of the Federal Trade Commission's 2012 Consumer Sentinel Network Data Book because the report reveals that two states within the Federal Reserve Bank of Atlanta's footprint, Florida and Georgia, have the highest rates of identity theft in the United States. In 2012, Florida had 361.3 identity theft complaints per 100,000 people, followed by Georgia, with 193.9.

On closer inspection of the report, I learned that nearly half of identity theft complaints stem from "government documents or benefits fraud," and more than 93 percent of these complaints are tax- or wage-related fraud. In Florida and Georgia, government documents or benefits fraud accounts for 72 percent and 66 percent, respectively, of identity theft complaints. What could be the reason behind this high incidence of identity theft in these two states?

Two things stand out in terms of their population. For Florida, it is the "oldest" state; it has the highest percentage of its population comprised of people aged 65 or older. For Georgia, it is a "military" state, with a higher percentage of its population comprised of active military and civilian personnel than most other states. In fact, of the four Georgia metropolitan areas that rank in the top 15 for identity theft complaints in the United States, three have a significant military presence. Atlanta, ranked #8, is the outlier.

The identity theft rate in Florida doesn't come as a big surprise given its elderly population and the rising incidence of financial crimes targeting that population segment. (A Portals and Rails post highlighted this trend about two years.) But I was surprised to see Georgia ranked second, though maybe I shouldn't have been with the large number of military bases in the state. Identity theft among those in the military has been an ongoing problem. In fact, a West Point professor, Lieutenant Colonel Gregory Conti, wrote about this significant problem in 2010.

Presumably, other factors beyond high rates of elderly and military populations played a role in catapulting Florida and Georgia to the dubious position of tops in identity theft complaints. However, we can't overlook that both the elderly and military personnel are prime targets for identity thieves. What can those institutions and entities that serve these segments of the population do to educate them on the dangers of identity theft and prevent them from becoming victims of this crime?

Douglas A. KingBy Douglas A. King, payments risk expert in the Retail Payments Risk Forum at the Atlanta Fed

June 10, 2013 | Permalink


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