Identity Theft a Risk to Consumers As Online Purchases Increase



Over the last year, the coronavirus pandemic has changed almost every aspect of American life, including shopping habits. In fact, 56% of Americans reported an uptick in their online shopping between mid-March and December of last year, according to a new survey from the AICPA. But Americans may not be doing all they can to protect themselves from identity theft while shopping online.

Nearly 1 in 5 (19%) survey respondents said they fell victim to identity theft or attempted identity theft in the past year. Many Americans view identity theft as a real threat, with 60% saying it’s at least somewhat likely they’ll suffer a financial loss due to the crime in the next year, according to the survey, which was conducted by Harris Poll on behalf of the AICPA. The survey polled 2,116 U.S. adults online in December 2020.

Robert Westley, CPA/PFS, a member of the AICPA’s National CPA Financial Literacy Commission, said anyone can fall prey to identity theft.

“Criminals are getting smarter and using technology more to their advantage every single day,” he said.

Many Americans aren’t taking steps that could protect them while shopping online, the survey found. Fewer than half (45%) of respondents said they check their banking apps or credit card statements after making online purchases to ensure the amount they were charged matches the purchase price they were expecting. Twenty-six percent of respondents said they used the same password across multiple websites.

Westley recommends online shoppers come up with tough-to-guess passwords that they change every three to six months. Just 50% of survey respondents said they update their password at least that frequently.

“A strong password is a great first line of defense,” Westley said.

And while children are becoming increasingly tech-savvy, it’s important for parents to discuss online security with their kids, he said. Other measures that can prevent identity theft include sticking to encrypted sites, using anti-virus programs, and installing the latest software updates on computers and mobile devices, he noted.

“Cybercriminals frequently gain access to information by using known flaws in the software and operating systems that run in computers and phones. Updates are crucial for patching these flaws and vulnerabilities,” he said.

Identity theft can have a serious impact on a person’s credit. Americans should check their credit report at least once a year but may benefit from doing so more frequently in some cases, such as when they’re planning to apply for a loan or look for a new job, Westley said.

“Checking your credit report routinely is a great way to assess which areas of your personal finances may need improvement,” he said. “It’s also important to regularly check the report for inaccuracies. You don’t want to be in a situation where you are applying for credit and denied because of something on the report that you could have proactively managed.”

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Source: Journal Of Accountancy

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