In an age of digitized data, consumers and businesses can lose thousands of dollars in the blink of a hacker’s eye. The costs of data theft are well known to anyone who has ever found themselves victim to financial identity or medical record fraud.
What few of us realize is that the procedures required to right a financial wrong are often costlier than the crimes themselves. They can end up not only hitting our pocket books, but also damaging important factors in our lives, like credit scores, insurance policies, and access to medical assistance.
The economy loses an average of $22,346 every time an identity is stolen. And to fully recuperate losses, repair credit, and prosecute fraudsters, consumers, accountants, lawyers, and IRS officials can spend up to 5,000 hours – the equivalent of two years of full-time work – on a single case. Even so, 60% of medical record fraud victims admit that they don’t monitor their medical statements for inconsistencies, potentially inviting havoc on the future stability of their medical records and policy options.
For one, most consumers don’t have time every month to file through complex medical or financial statements and verify accuracy. And secondly, the image of thousands of evil savants working around the clock to hack BOA databases sure makes a consumer feel helpless.
Identity theft seems random and unpreventable – a stroke of bad luck like getting struck by lightning. If we are struck, we tell ourselves that banks, credit agencies, and insurance companies are legally bound to recover our funds and correct our records. But this is not always guaranteed and is rarely simple to accomplish.
Check out the latest video in our Hidden Costs Series to get a deeper look at how our high-cost, high-risk data management systems really work.
- Video Transcript
- Health: F
- Data theft includes financial identity theft, identity cloning, and medical identity theft. The average cost per victim was $22,346 in 2012. And the total national cost of just medical identity fraud was $41 billion in 2012. The worst part – nearly 60% of reported victims say they don’t ever check their medical records for fraud. Depending on the severity of the case, it can take over 5,000 hours (the equivalent of working a full-time job for two years) to correct the damage.
- Environment: F
- Since 1935, over 435 million social security cards have been issued. That’s over 2,175 tons of paper issued as cards, or 52,200 trees and 5 million new cards are issued every year. Worldwide, digital warehouses storing private information, like banking and personal history, use about 30 billion watts of electricity, which equals roughly the output of 30 nuclear power plants. Data centers in the US make up almost a third of that usage, and waste 90% of the electricity they pull off the grid.
- Economy: F
- On average, 47% of victims encounter problems qualifying for a new loan and 70% have difficulty removing the negative information from their credit reports. Over the next five years, the IRS stands to lose as much as $21 billion in revenue due to identity theft, and worldwide, businesses lose close to $221 billion a year with the US, UK, Canada and Australia ranking the highest in reported fraudulent activity.
- Final Grade: F