Americans are more connected than ever, linking all types of home devices to the internet.
Smartphone ownership has grown to almost nine of ten adults, while home communications networks stream new entertainment options and control home automation.
This gives hackers and other cyber criminals more opportunities to target individuals in their homes and away on public Wi-Fi networks.
Cybercrime is rising, and people are worried. They’re more aware of cyber exposures as they increasingly review their credit reports and move to protect themselves with cyber insurance.
These trends are highlighted in HSB’s latest consumer survey, showing cybersecurity threats continue to grow, even as technology makes our lives easier.
Identity theft is a big concern
HSB commissioned Zogby Analytics to conduct three cybersecurity surveys that highlight consumer experiences over the past five years. The most recent poll released in 2020 questioned 1,515 adults across the United States (with a margin of error of 2.5%).
The survey found that 77% of consumers were very or somewhat concerned about online identity theft. Almost as many were concerned that they could be hacked or have their personal data stolen while shopping on a public Wi-Fi connection.
Those fears were reflected in the survey results.
The number of consumers who said their identities were stolen increased to 23%, up 5% over similar HSB surveys in 2018 and 2016. Victims spent an average of 27 hours to monitor their credit and correct personal information.
Cyberattacks can be costly
One-third of consumers (34%) said they had experienced a cyberattack, and 59% of them spent more than $500 to respond.
A computer virus or other malware was the most typical damage (72%), followed by damage to software or operating systems (41%).
Almost a quarter of consumers (23%) had their email or social media accounts interfered with, taken over, or used by an unauthorized person, continuing a slowly rising trend.
The number of people who were aware their computer systems or components had been used, without their consent, in a computer attack against a third party nearly tripled to 13% over four years, up from 5% in 2016 and 6% in 2018.
Those incidents were more likely to result in disputes or accusations — 28%, compared to 13% previously. Of those accused, 89% consulted attorneys, and most of them paid substantial amounts in legal fees and settlements.
Ransomware and online fraud
Although ransomware attacks were steady (11%), victims were more likely to pay criminals to unlock their data or keep it private. About half said they paid the ransom, in most cases $2,000 or less, compared with about one-third in the earlier surveys.
Online consumer fraud nearly doubled from previous HSB surveys, to 16% of individuals. These victims said most of those crimes were committed through payment services (48%), online auctions (21%) and dating websites (20%).
Smartphone ownership soars
What’s driving the increase in cybercrimes against consumers? One major factor is that Americans are connecting more mobile and home devices to the internet.
Smartphone ownership continues to surge, reaching 89%, up from 77% in HSB’s 2016 survey. Increases also were reported in home entertainment and gaming components, alarm, security and camera systems, connected thermostats and other home automation.
Consumers understand the risks
It’s not surprising that with cybercrimes rising and technology spreading, consumers are more aware of the risks and are taking action to improve online security and reduce their exposures.
The survey found that 70% regularly monitor their credit reports, and 41% subscribe to a credit monitoring service, both up 11% from 2018. The number of consumers covered by cyber insurance increased the same amount to 25%.
The use of password organizers doubled to 33% in the past five years as 43% of consumers used two to five passwords and 27% six to ten passwords.
Only 10% used a single password, which would indicate they used the same password for multiple accounts, greatly increasing their exposure in a cyberattack.
Cybercrime can be managed
Digital criminals will always find ways to steal personal data and exploit that information.
The proliferation of connected technologies in our homes and phones will provide new pathways for hackers and other bad actors to attack our privacy and financial assets.
It may seem like a never-ending battle to protect our names and credit, but it’s a risk that can be managed.
By paying attention to safe cyber security practices, consumers can significantly reduce the chances of identity theft, computer attacks and online fraud.
The insurance industry can provide comprehensive coverage and recovery services that will help protect consumers against the inconvenience and financial loss of cybercrimes.
Timothy Zeilman ([email protected]) is a vice president with HSB, part of Munich Re, which provides a range of specialty insurance products. He leads HSB’s cyber insurance efforts and has responsibilities that include setting HSB’s institutional strategy for commercial and personal lines cyber and privacy coverages.