November 29, 2007 | written by James Van Dyke
Gartner accuses FTC of knowingly releasing inaccurate information?
Here’s irony for you: according to both the USA Today and American Banker, Gartner suggests that the federal agency (FTC) with primary responsibility for pursuing those who make false claims has knowingly released a report that the FTC itself doesn’t trust.
According to an article in the American Banker (registration required):
” Avivah Litan, a vice president and research director at the Stamford, Conn., market research company Gartner Inc., said she thinks the FTC delayed releasing the report because “the results contradict their own findings in other areas and they contradict other research studies. It’s obvious they sat on this report because they question the accuracy of this information.” ”
According to an article in the USA Today:
” “The numbers are unreliable,” says Avivah Litan, an analyst at market researcher Gartner. (IT) Litan wrote a report, released this year, that showed an increase in identity-theft among American adults, to 15 million, in the 12-month period ended in August 2006. “The methodology is flawed. I think that’s why they delayed the report,” she says. ”
Within the field of quantitative research, let’s not forget that we can move beyond conjecture and endless debate by assessing methodologies through time-tested methods. Consumer safety really is at stake here, because when we spend time questioning the reliability of fraud data, we distract from the effort of protecting consumers and our financial system. It’s vital that experts in the fields of security, law enforcement, and financial transactions have some reliable yardstick to measure the nature and size of identity crimes, from which they can determine the actions that will produce the strongest safety gains. Javelin produces two annual reports assessing the kinds of safety features actively being implemented by banks and card issuers in an effort to provide relevant feedback to the industry about what IS being done to combat fraud, and believe me when I say that many bankers are unhappy with the results of the reports (unfortunately, not everyone can rank highest on customer safety features).
I could go into a long analysis here about the merits of various data collection or question-design methodologies, but out of fairness, since Javelin publishes a similar survey this would be better left to another person who is familiar with statistically-sound data collection and analysis methods. Any quant. experts up to the challenge of assessing methodologies?
This reminds me of (Bill) Clinton’s famous quote: “define IS”.
With all the slinging of stats around ID theft/fraud, it really raises the question: What constitutes an instance of it? Someone reporting it to the appropriate authorities? Someone responding to a survey saying that they were a victim?
The press loves to pick up market research stats from firms like yours and Gartner to drive headlines. Unfortunately, they don’t provide any help in defining what they’re reporting on, or helping their audience understand why there are differences in the estimates/forecasts.
Ron, great question on “what is ID theft/fraud?”
In our research, it’s any actual transaction conducted in another person’s name without their authorization. (This abbreviated definition is near identical to the result of the FTC’s survey)
Bottom line, in Javelin’s annual ID fraud surveys we arrive at measures of victims, dollar amounts and other detailed victimization patterns by having phone interviews with 5,000 people (with proportionate representation by age, gender, income and ethnicity). Because the structured interviews are conducted the same way to 5,000 people (with more detailed questions for victims) that represent the entire country each year, we really do have a clear sense how the volume and pattern of the dynamic, damaging crime is changing over time. (And believe me, criminals do change, sometimes with tragic consequences for the hardest-hit victims).
We use the two terms uniquely (at Javelin theft=taking the data, and fraud=transaction using the stolen data) while for the FTC and Congress all unauthorized transactions conducted in another person’s name constitute “identity theft”. To many payments industry people there’s (existing account) “card fraud”, and the term “identity theft” is reserved for more egregious cases of new account establishment or existing account takeover (which unfortunately leaves gray around the varying definitions of “egregious”).
Our research methodology is available to any qualified member of the nationwide media, consumer advocacy group, government or law enforcement. In fact, we strongly encourage all those that claim to have rigorous identity-safety research to similarly offer up their methodology for independent review, because there’s a lot at stake here.
(Note that Ron Shevlin is a former Research Director at Forrester)