But the good news was balanced by results showing that young adults, despite their tech-savviness, are at greater risk for ID fraud, and that a fraud-detection "digital divide" separating the wealthy and the poor was also emerging, according to Javelin Strategy & Research.
"Lower-income people (less than $15,000 per year) are less likely to be victimized by ID fraud, but it tends to last twice as long," said James Van Dyke, president of the Pleasanton, Calif.-based research firm. And the trauma of fraud tends to cause poorer people, whether the fraud was committed online or not, to shun the Internet and other technology that could potentially cut their risk of ID fraud.
"Lower-income people essentially run away from computers," he said.
The latest annual survey from Javelin found that total ID fraud in 2006 added up to $49 billion, down from $55.4 billion in 2005. The percentage of people affected by fraud has steadily fallen from the first survey in 2003, when it was 4.7 percent, to 3.7 percent last year.
"The problem hasn't gone away, but we have turned a corner," Van Dyke said.
Moreover, new account fraud, which involves perpetrators stealing victims' personal information and creating bank or credit accounts that they can raid for cash and abandon, dropped significantly from 2005 to 2006, from 1.52 percent of Americans to 1.05 percent. The total cost of that fraud also fell 25 percent, to $17.9 billion. And the average value of the fraud fell 30 percent, to $7,261 per victim.
Javelin's annual survey is sponsored by leading financial institutions, including Visa, Wells Fargo Bank and CheckFree Corp. But Van Dyke emphasized that neither the survey, which quizzed 5,000 people by telephone, nor its results, were influenced by the sponsors.
People making more than $150,000, while the most likely to be victimized at 7.3 percent, also tend to take the smartest measures to prevent future fraud, such as canceling paper statements and monitoring their accounts online.
"They know computers are here to stay and use them to their advantage," he said.
Young people between the ages of 18 to 24 were also at a higher risk for ID fraud, at a rate of 5.3 percent. Van Dyke attributed that mostly to carelessness. Young people were less likely to stop receiving paper statements or to shred them. And belying their Web smarts, they were much less likely to use antivirus, antispyware or firewall software.
He conceded, though, that lifestyle issues, such as the greater likelihood of young people having roommates and also moving from apartment to apartment, may also raise their risk.
Javelin has long emphasized that its results show that while online fraud caused by shadowy elements may grab headlines, most fraud is committed by people close to the victims and/or through decidedly low-tech means.
The 2006 survey results continue to bear that out, Van Dyke said. Of the 42 percent of victims who knew how their personal information was stolen and the fraud committed, only 4 percent said phishing was the cause, while 38 percent said the cause was a stolen wallet or credit card.
All told, online causes of fraud, including phishing, viruses or spyware, totaled just 16 percent of identity fraud. That is up from the 9 percent of ID fraud cases that started online in 2005, though Javelin said its sample size is so small that the increase is not statistically significant.
Of 31 percent of victims who knew the perpetrator's identity, one-quarter said it was a family member or relative, while 23 percent said it was a friend, neighbor or in-home employee. By contrast, just 2 percent were people they'd met over the Internet, and another 2 percent were employees at a financial institution.
Van Dyke said he didn't think that in the remaining 70 percent of cases that the population of perpetrators was skewed differently.
Van Dyke said that the drop in new account fraud could be credited in part because of changing practices by banks and credit card companies to detect fraud more quickly, as well as enable customers to nip it in the bud.
For instance, some banks now let customers permanently turn off the option to transfer money internationally, a favorite tactic of scammers who have compromised a victim's existing account.
So what can people do to stop fraud? Van Dyke's top recommendation is to get rid of paper bank statements and invoices, which he said was more effective than shredding them after the fact. People should also carry only the personal pieces of ID that are absolutely necessary. Other forms of identification, such as Social Security cards or rarely used credit cards, should be left in secure places, such as a personal safe.
Online, people should also use strong PINs and passwords and never provide personal information except when it is a trusted source.