Financial Consequences of Identity Theft: Evidence from Consumer Credit Bureau Records

Nathan Blascak, Julia Cheney, Robert Hunt, Vyacheslav Mikhed, Dubravka Ritter and Michael Vogan

No 19-2, Working Papers from Federal Reserve Bank of Philadelphia

Abstract: This paper examines how a negative shock to the security of personal finances due to severe identity theft changes consumer credit behavior. Using a unique data set of consumer credit records and alerts indicating identity theft and the exogenous timing of victimization, we show that the immediate effects of fraud on credit files are typically negative, small, and transitory. After those immediate effects fade, identity theft victims experience persistent, positive changes in credit characteristics, including improved Risk Scores. Consumers also exhibit caution with credit by having fewer open revolving accounts while maintaining total balances and credit limits. Our results are consistent with consumer inattention to credit

Keywords: fraud alert; consumer protection; identity theft; credit reports; Risk Score (search for similar items in EconPapers)
JEL-codes: D14 D18 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2019-01-09
New Economics Papers: this item is included in nep-ict
Note: Superceded by 20-33
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedpwp:19-2

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DOI: 10.21799/frbp.wp.2019.02

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