It is difficult to answer exactly how much identity theft costs Americans today. There are many different types of identity theft, all of which have to be bankrolled somehow. Often, numerous types of theft that seem minor are actually very substantial when the costs to all stakeholders are involved.
Credit card information can be stolen, sold, and used for a variety of illegal activities. In fact, credit card information can be stolen with the use of an electronic device from a criminal waiting in line in front of a victim at a brick and mortar storefront. No matter which method is used to acquire credit card information, the cost almost always is more substantial than loss to the consumer.
In a typical scenario, a customer will make a purchase on a Friday night. The merchant will process the credit card payment in person or take the information, and there will be no issue for the next few days. Almost all credit card payments are only processed on banking days. The customer can figure out the card was stolen the following day, and cancel it (as the customer should). However, the merchant can be out of luck. The payment cannot be processed. Additionally, merchants do not always have to ability to contact customers.
In another typical scenario, a customer will learn that his or her card has been unlawfully charged. The bank will have to foot the bill in order to address the issue. The total assets of large American banks are in the trillions of dollars. However, continual customer refunds can add up. Changing bank regulations also limit abilities to derive revenue, and the costs are eventually passed on to other patrons of the bank. Arguably, changing financial regulations also have a notable impact on anyone who wants to finance a home or has to pay taxes.
A short summary of stakeholders directly affected by credit card fraud and identity theft include:
It is impossible to pinpoint an exact dollar amount that represents exactly how much identity theft costs U.S. citizens. Would your morning coffee be cheaper if swipe fees were lower? Would swipe fees be lower if costs associated with identity theft did not have to be addressed? Could you get a better rate on your mortgage and save hundreds of dollars every year? Would you owe as much in local and federal taxes?
It is difficult to tell. Identity theft and credit card fraud impact everyone. It is easy to estimate the overall impact of identity theft totals billions of dollars annually in the United States alone. As a responsible citizen, you should take reasonable measures to keep your credit card information safe. You might not be able to take down a global criminal enterprise, but you can make it more difficult for criminals to acquire your credit card information.