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Identity theft as a teachable moment

Author

Listed:
  • Cheney, Julia S.

    (Federal Reserve Bank of Philadelphia)

  • Hunt, Robert M.

    (Federal Reserve Bank of Philadelphia)

  • Mikhed, Vyacheslav

    (Federal Reserve Bank of Philadelphia)

  • Ritter, Dubravka

    (Federal Reserve Bank of Philadelphia)

  • Vogan, Michael

    (Federal Reserve Bank of Philadelphia)

Abstract

This paper examines how instances of identity theft that are sufficiently severe to induce consumers to place an extended fraud alert in their credit reports affect their risk scores, delinquencies, and other credit bureau variables on impact and thereafter. We show that for many consumers these effects are relatively small and transitory. However, for a significant number of consumers, especially those with lower risk scores prior to the event, there are more persistent and generally positive effects on credit bureau variables, including risk scores. We argue that these positive changes for subprime consumers are consistent with the effect of increased salience of credit file information to the consumer at the time of the identity theft.

Suggested Citation

  • Cheney, Julia S. & Hunt, Robert M. & Mikhed, Vyacheslav & Ritter, Dubravka & Vogan, Michael, 2014. "Identity theft as a teachable moment," Working Papers 14-28, Federal Reserve Bank of Philadelphia.
  • Handle: RePEc:fip:fedpwp:14-28
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    References listed on IDEAS

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    Cited by:

    1. Cheney, Julia S. & Hunt, Robert M. & Mikhed, Vyacheslav & Ritter, Dubravka & Vogan, Michael, 2014. "Consumer use of fraud alerts and credit freezes: an empirical analysis," Payment Cards Center Discussion Paper 14-4, Federal Reserve Bank of Philadelphia.

    More about this item

    Keywords

    Inattention; Identity Theft; Fraud Alert; Consumer Protection; Credit Report; Fair And Accurate Credit Transactions Act (FACTA); Propensity Score Matching;

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • D18 - Microeconomics - - Household Behavior - - - Consumer Protection
    • G02 - Financial Economics - - General - - - Behavioral Finance: Underlying Principles

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