Introducing Identity Fraud in Focus, our new quarterly report for Oct - Dec 2021

By Allstate Identity Protection

With Identity Fraud in Focus, we dive into the latest fraud numbers each quarter so experts, organizations, and consumers can stay informed about emerging threats online.

Read our report to discover:

  • The 5 most common identity theft and fraud crimes
  • The latest on the spike in unemployment fraud as tax season begins
  • A new wave of government benefits fraud to watch out for

Key takeaways from the last quarter of 2021

Between October and December 2021, our total identity theft and fraud cases increased by 11%, led by rapid spikes in instances of fraudulent credit and/or loan account creation, inquiries, and applications.

5 Most Common Identity Theft & Fraud Crimes
from Oct - Dec 2021

1. Fraudulent credit and loan accounts
2. Credit- or loan-application fraud
3. Unemployment and tax fraud
4. SBA loan fraud
5. Account takeover (e.g., credit card account takeover)

Fraudulent credit and loan accounts

Fraudulent creation of new credit and loan accounts grew by 61% from 2020 to 2021. By December 2021, this type of fraud accounted for over half of our total identity theft cases.

What makes this particularly concerning is it can circumvent many of the anti-fraud tools and protocols banks implement to prevent fraudulent transactions from being processed.

Credit- or loan-application fraud

Another 42% of cases from October to December 2021 were instances of credit and loan applications. Fortunately, these fraudulent attempts were caught before new credit accounts were established, but with the victims’ personal information still out there, another tactic is likely.

Account takeover

Another problematic trend to keep an eye on is account takeover fraud, which is when a fraudster gains access to a victim’s login credentials or personal information in order to make unauthorized transactions or steal additional data.

Although new cases of account takeover fraud decreased 32% year over year, the remediation dollars saved increased by more than 50%, suggesting this is a lucrative way for fraudsters to take advantage of millions of compromised usernames and passwords.

“Stories from our members are a constant reminder that identity theft and fraud come in all shapes and sizes. From fraudulent online purchases of $100,000 luxury vehicles to new accounts at banks they’ve never once set foot in, we see it all and pride ourselves on the powerful fraud-catching tools we offer to provide peace of mind,” says Allstate Identity Protection VP of Product Lewis Bertolucci.

Quick takeaways

61%

The increase in fraudulent credit and loan accounts from 2020 to 2021

42%

The total percentage of our credit or loan application fraud cases

32%

The decrease in new account takeover fraud cases year over year

The latest on the spike in unemployment fraud as tax season begins

Allstate Identity Protection continues to see reports of unemployment and tax fraud on the decline, with both constituting just 1% and 0.6%, respectively, of total remediation efforts between October 1, 2021 and December 31, 2021. Fueled by the pandemic, unemployment fraud at one point accounted for nearly three-quarters of all Allstate Identity Protection remediation cases. 

With the launch in August 2021 of our Unemployment Fraud Center — a free resource for members and non-members alike who suspect they may have fallen victim to unemployment fraud — we were able to give users tools to file claims quickly. 

By resolving these unemployment fraud cases, Allstate Identity Protection helped members save $16,828,834 in taxes they would have been on the hook for last year.

The end of pandemic-linked jobless aid programs in September 2021 further contributed to the decline in stolen government benefits.

“Though steep drop-offs in unemployment and tax fraud are encouraging, we expect to see both on the rise again this tax season, as many victims of these types of fraud do not realize they have been targeted until they file taxes,” Bertolucci added.

Quick takeaways

1%

of our total cases in Q4 were unemployment fraud

$16,828,834

The amount of tax dollars we helped members save in 2021

A new wave of government benefits fraud to watch out for

After defrauding the government agencies that handle unemployment fraud, scammers may be turning to the state-level agencies that oversee disability benefits.

Cyber criminals are increasingly using stolen personal information to file false disability insurance benefits. In January 2022, California’s Employment Development Department suspended 345,000 disability claims while they worked with regulators and medical provider groups to verify legitimate cases. And here at Allstate Identity Protection, we’ve seen open cases involving false disability insurance claims in California double in November and December 2021.

“If criminals are able to receive money this way, we may see even more fraudulent disability claims,” says Allstate Identity Protection Director of Customer Care Brian Stuart.

As this year’s tax season gets underway, we recommend Americans watch out for signs of disability fraud. Victims may receive a letter related to disability benefits for which they did not apply, or an employer may notify the victim that someone has filed for disability in their name.

About Identity Fraud in Focus

Allstate Identity Protection helps safeguard families from identity theft and financial fraud while empowering them to take more control over the personal information they share online. 

“In today’s digitally connected world, cyber fraud and identity theft have become the ultimate crimes of opportunity: as quickly as vulnerabilities are detected and protected against, new ones emerge,” says Emily Snell, President of Allstate Identity Protection. “Yet, few resources exist to help consumers, experts, and the media understand digital fraud and the latest attacks. This is precisely the problem we hope to solve with our quarterly Identity Fraud in Focus reports.”

Let's connect

If you're considering one of our services, want more information, or need assistance, please reach out. We’re here to help.