The Connection Between Recession and Crime Rates
National Consumer Protection Week is all about helping people identify and defend themselves against fraud and scams. Over the past few years, the rising rates of identity theft and fraud have been somewhat mitigated by growing consumer awareness.
But now, as we enter what looks to be a recession, there are new risks to consider. Periods of economic downturn commonly bring with them increased crime rates. The 1989 recession led to higher crime rates in New York and other cities. Alcoholism and drug use are also thought to increase in a recession. This is particularly worrisome because, there is often a tie between drug use (especially Methamphetamines) and identity theft.
Could a recession this year mean an increase in financial fraud and identity theft rates along with other crime rates? The 1989 recession predated the boom in technology driven financial fraud and the 2002 recession was fairly minor, so there isn't much of a precedent. Since this downturn is particularly tied to the financial industry, it could be especially easy for consumers to fall for loan and credit scams. What do you think will happen?
National Consumer Protection Week next year may be even more important.
Emily Davidson – A former TransUnion insider and a member of Credit.com's expert team. Emily writes about credit reports, credit cards, loans and personal finance as the CreditBloggers.com editor.
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