Javelin published our annual ID Fraud this week, and the FTC’s Consumer Sentinel Study happened to follow a few days later. I’m a big fan of the Consumer Sentinel study, with it’s annual format, solid categories, and clear disclosure of what it measures, how it should be used, as well as the methodology behind it (would that all identity crime “research” follow the FTC’s example!). A few have asked how Javelin can show that ID fraud dropped across the nation when the FTC shows complaints rising. The answer is simpler than you think: people complain more as problems get worse.

The FTC measures complaints rising by 20%, Javelin shows crime incidents dropping by 5%, with average per-victim losses going up by 25%. Logic says that you’re more likely to file a complaint when your losses rise, and assuming the ratio of increase is a straight line, 20+5%=25% right on the button.

Regarding the FTC’s $2.1B figure, it reflects out of pocket costs, and again only for those who filed a police report. Javelin’s report shows out of pocket costs in the $5B range, which of course is much bigger than the FTC figure because the FTC report only reflects those that filed a criminal complaint, whereas the Javelin study is a representation of everyone in the US that was a victim of ID fraud.

Other differences: The FTC CS study accounts for crimes where the selling party was not who they claimed to be, or did not provide what was advertised. This “merchant fraud” (in Javelin parlance) is outside the scope of Javelin’s identity study.

Our analysts are at work at a deeper comparison between the two studies, which will be available to Javelin subscribers soon. Stay tuned.