U.S. Identity Theft Protection Services Market Size, Share & COVID-19 Impact Analysis, By Type (Credit Card Fraud, Bank Fraud, Phone or Utility Fraud, and Employment or Tax-Related Fraud), By Application (Consumer and Enterprise), and Country Forecast, 2023 -2030

The U.S. identity theft protection services market size was valued at USD 2.96 billion in 2022. The market is projected to grow from USD 3.32 billion in 2023 to USD 7.60 billion by 2030, exhibiting a CAGR of 12.5% during the forecast period.

Identity theft protection services offer wide-ranging solutions that are designed and developed to aid individuals and businesses in safeguarding their personal and financial information from unauthorized access, misuse, and fraudulent activities. These services offer a range of proactive measures to detect, prevent, and mitigate the risks associated with identity theft.

Rising online theft and fraud due to the growing usage of digital technologies and mobile payment applications, increasing concerns over data privacy, and financial losses are contributing towards the U.S. identity theft protection services market growth. For instance,

• According to industry experts, the number of fraud cases associated with deep fakes in the U.S. increased from 0.2% in 2022 to 2.6% in the first quarter of 2023.

COVID-19 IMPACT

Increasing Number of Frauds and Online Thefts During Pandemic Accelerated the Market Growth

The COVID-19 pandemic had a massive impact on identity theft and online fraud cases. During this period, there was a major surge in fraudulent calls, emails, and letters from scammers pretending to be Internal Revenue Service (IRS) officers.

Increased online shopping was one of the major factors that caused customers in the U.S. to fall for such online scams and frauds. In spite of knowing the possibility of being a victim of online identity theft, a recent Experian survey discovered that 33% of customers stated that they engaged in online shopping during the COVID-19 pandemic more than before.

Subsequently, online shopping recorded the largest number of informed scams to the FTC (Federal Trade Communication) – approximately 53,000 complaints or around 17% of all reported fraud.

• In March 2021, according to the TransUnion analysis, the number of customers who had been targeted by digital frauds or online scams associated with COVID-19 in the last three months was higher than about one year ago. In the U.S., the percentage of reported scams increased from 26% to 38% during the same timeframe.

With such a major rise in the number of frauds and online scams, Americans have become increasingly aware of the risks, losses, and effects of these thefts.

LATEST TRENDS

Incorporation of AI and Machine Learning in Identity Theft Protection Services to Propel Market Growth

Identity theft is growing substantially in the digital era, where financial organizations have become ideal targets for scammers due to their security flaws. As technology progresses, identity thieves constantly adapt their schemes, and thus, the implementation of Artificial Intelligence (AI) to fight against this common threat can be more effective.

By combining the capabilities of Machine Learning (ML), real-time monitoring, and data analytics, AI analyzes huge amounts of data to detect patterns and problems that help users find out fraudulent activity. Hence, various key players are developing their solutions with AI-ML proficiencies to deliver enhanced service to their customers. For instance,

• In October 2023, McAfee announced the launch of its new AI-driven Scam Protection that identifies and safeguards against risky links in real time and is accessible across most of its subscription plans. The next-gen threat protection solution is an AI-powered cloud infrastructure that claims to deliver stronger and faster threat protection.

Thus, such enhancements with the integration of new technologies will aid the vendors in delivering better solutions and services.

DRIVING FACTORS

Rising Online Theft and Fraud to Increase Necessity for Identity Theft Protection Services

Identity theft is the illegal act of stealing somebody's personal data and then using it for fraudulent purposes. It's a digital theft where criminals access sensitive data, such as bank account numbers, social security numbers, or credit card information.

Various reasons that are increasing the number of identity thefts include the growing number of social media users, surge in usage of online platforms, digitalization of businesses, changing landscape of e-commerce, and many more. With this, the different types of identity thefts are also increasing, such as bank frauds, tax-related frauds, and credit card frauds.

An increasing number of data breaches in recent times has encouraged fraudsters to access PII (Personally Identifiable Information) more effortlessly and practice it against customers. Such frauds and online crimes threaten the security of individuals by using their personal information.

• According to Aura, an identity theft protection service provider, in 2022, Americans lost approximately USD 10.3 billion due to emerging online frauds and scams. Also, the amount lost due to digital thefts had doubled since 2020.

By using identity theft protection services and other data protections, consumers in the U.S. can protect themselves from such cyberattacks while maintaining their privacy. Hence, rising use of such services is advised in the country to avoid these issues and losses.

Such an increase in frauds and thefts causes customers to lose a hefty amount of money, thus increasing the demand for these services.

RESTRAINING FACTORS

High Cost of Identity Theft Protection Services and Lesser Availability of Free Services to Impede Market Growth

Identity theft protection services come with a wide range of monthly subscriptions and higher fees. If the consumer is comfortable with paying a monthly fee, many of these services can be used to keep tabs on the customer’s personal information.

The cost of identity theft protection services can range from approximately USD 10 to USD 35 per month, depending on the company and type of service it chooses. Along with these, several other aspects are attached, such as expertise, coverage, and convenience fees.

Large enterprises can easily afford such fees, but this might not be the case for small enterprises or startups. It is expensive even for individuals who are looking to protect their whole family.

Such factors can be a deterrent to some organizations and consumers, especially those with budgetary constraints. They can certainly affect the growth of this market.

SEGMENTATION

By Application Analysis

Rising Number of Online Financial Transactions Propelled the Product Use in Consumer Applications

Based on application, the market is bifurcated into consumer applications and enterprise applications.

The consumer applications segment accounted for the highest U.S. identity theft protection services market share in 2022. As individuals conduct more activities online, from banking to shopping and socializing, they become more susceptible to identity theft. Consumers are recognizing the necessity for proactive measures to secure their digital identities, thereby fueling the segment’s growth.

The enterprise segment is anticipated to record a maximum CAGR in the coming years as they store vast amounts of personal and financial information about their employees. Identity theft protection services help companies safeguard employee data, thereby reducing the risk of identity theft and related fraudulent activities. Thus, enterprises in the U.S. are increasingly adopting these services as a proactive approach to cybersecurity, thereby boosting the segment’s growth.

By Type Analysis

Rising Rate of Credit Card Fraud Segment Led to Product Adoption

Based on type, this market is segmented into credit card fraud, bank fraud, phone or utility fraud, and employment or tax-related fraud.

The credit card fraud segment captured the highest revenue share of the market in 2022 as it is the most common type of identity theft in the U.S. Rising credit card fraud cases is due to the growing number of online financial transactions. For instance,

• The FTC recorded approximately 2.8 million cases of credit card fraud in the U.S. in 2021. This type of fraud is occurring so often that even banks provide 24/7 hotlines, especially for victims, to report stolen and lost cards.

The bank fraud segment is projected to record the highest CAGR during the forecast period due rising number of bank fraud reports in the U.S. According to a Federal Trade Commission (FTC) report, bank fraud cases rose by 25% in 2022 in the U.S. as compared to those recorded in 2021.

COUNTRY INSIGHTS

The U.S. experiences a major increase in the number of identity theft cases each year, including data breaches, financial frauds, and other forms of unauthorized access. For instance,

• In 2021, businesses across the U.S. were estimated to lose more than USD 721 billion due to identity-based frauds. In addition, consumers incur an average loss of over USD 1,100 per person due to these frauds. These incidents have heightened awareness and prompted individuals to seek protection services.

In addition, tax-related identity theft is a specific concern during tax season. Individuals in the U.S. seek identity theft protection services to secure their personal and financial information, particularly during the tax filing process, which is expected to fuel the market’s growth in the country.

KEY INDUSTRY PLAYERS

Growing Focus on Integrating Novel Technologies in New Products to Strengthen Key Players’ Market Position

The key market players are keen on integrating new mechanisms or technologies into their identity theft protection services for different industries. Raising funds to enhance the performance of solutions by using pioneering technologies is one of the prominent approaches that these companies have adopted. Likewise, they are constantly cooperating and forming partnerships with government organizations, security agencies, and entities in the U.S. to expand their range of these services.

List of Key Companies Profiled:

• Equifax, Inc.  (U.S.)


• Gen Digital Inc. (U.S.)


• TransUnion (U.S.)


• Experian Information Solutions, Inc. (U.S.)


• Broadcom, Inc. (U.S.)


• LexisNexis Risk Solutions (RELX Group) (U.S.)


• Fair Isaac Corporation (U.S.)


• Kroll, LLC (U.S.)


• McAfee, LLC (U.S.)


• Discover Financial Services (U.S.)

KEY INDUSTRY DEVELOPMENTS:

• September 2023: TransUnion launched TruIQ Data Enrichment, which catered to financial institutions' need for accelerated data access and enhanced analytics capabilities. This solution offered unlimited on-demand access to credit data within a customer's private domain, providing a secure environment for data linking and enhancing analytics without relying on third-party processors.


• September 2023: Symantec partnered with Google Cloud to incorporate generative Artificial Intelligence (AI) into its Symantec Security platform in a phased rollout. Symantec utilized the security-specific language model (LLM) called Sec-PaLM 2 and Cloud Security AI Workbench by Google to enable natural language interfaces and generate more comprehensive threat analysis.


• September 2023: LexisNexis Legal & Professional launched Lexis+ Ireland, providing legal practitioners in Ireland with a user-friendly platform offering comprehensive research tools and practical guidance. This advanced solution consolidates an extensive range of legal resources of the country, including over 500 practice notes, templates, legislative data, and more than 20,000 Irish court judgments, thereby enhancing accessibility for legal professionals and students.


• February 2023: Discover launched a new website dedicated to open-source software development and fostering a tech community. This initiative aimed to promote knowledge sharing, skill enhancement, and collaboration among engineers, coinciding with the company's participation in the Linux Foundation and FINOS.


• January 2023: Experian introduced CreditLock, a newly launched feature enabling customers to secure their Experian Credit Report instantly. This innovative tool enabled individuals to 'lock' or 'unlock' their reports, blocking high-risk credit applications and providing real-time alerts to customers to prevent fraudulent activities, all without impacting their credit score.

REPORT COVERAGE

The report provides a detailed analysis of the market and highlights vital aspects, such as top companies, product types, and prominent solution applications. Besides this, it offers an in-depth understanding of the recent market trends and underlines essential industry advancements. Moreover, in addition to the factors specified above, the report looks into several other factors that have contributed to the evolution of the market in recent years.

Report Scope & Segmentation