Although smartphone users are using their devices to handle sensitive financial information, only 33 percent of owners have their device password-protected, according to a study from Javelin Strategy and Research.

Javelin?s 2012 ?Identity Fraud Report: Consumers Taking Control to Reduce their Risk of Fraud? report looked at how digital fraud is affecting mobile devices. The report also presented different behaviors that consumers are taking and how they can reduce their risk.

?People with smartphones tend to be more likely to participate in the types of transactions where they are putting in more personal information, which is an identity threat,? said James Van Dyke, president and founder of Javelin, Pleasanton, CA.

?As a marketing professional, part of the interaction I have to have is to make sure that I am not doing anything to make myself looking that I am unknowingly giving away personal information,? he said.

Mobile scam
Identity theft risk management service Intersections Inc. sponsored the Javelin report.

The report asked 5,022 adults about what types of identity fraud they have dealt with and found that identity fraud cases have increased 13 percent in 2011.

The goal of the report is to educate consumers and mobile professionals about the risks associated with digital identity theft and how they can prevent becoming a victim of fraud.

Thirty-three percent of smartphone owners in the study reported that they did not update their device?s operating system on a regular basis, which leaves their devices more susceptible to fraud and hacking.

The report also outlined a few tips to help consumers protect themselves from fraud.

Android devices have a larger chance of being hacked because the operating system is so open, meaning that Android users need to install an antivirus program to their devices.

Additionally, mobile users should be weary of downloading new applications before they have been tested and reviewed by users.

Mobile phone owners should also be hesitant to sign-up for premium SMS programs because they might be agreeing to certain licensing terms.

According to the report, users were most likely to be notified when they were financially scammed via a paper statement from their financial institution. However, with the amount of mobile banking activity that consumers are participating in, users need to take more advantage of mobile alerts and programs.

?Marketers and service providers can build apps that have built-in information to let consumers know what types of information will be shared,? said Joe Mason, senior vice president of consumer services for Intersections, Chantilly, VA.

?The findings point to part of the education that is involved in identity fraud, which makes all of our lives easier,? he said.

Social scam
In addition to the mobile device findings, the study also looked at how social media is affecting identity theft.

With the growing correlation between mobile and social media, it is important for mobile marketers to understand how the risks associated with social media.

For example, 55 percent of consumers in the study said that they had given away their birthdays to social media sites. Forty-seven percent of respondents gave away their email addresses, and 12 percent of consumers have given away their phone number, showing the opportunities that hackers have to access information.

Consumers who use social media by giving away their location are twice as likely to be put at a risk for fraud, illustrating the privacy concerns that have always surrounded check-in and location-based services.

Of all social media sites, LinkedIn was most likely to be spammed because of its emphasis on networking. LinkedIn is primarily made up of higher, well-connected consumers, which gives hackers the opportunity to sneak into groups and conversations.

?We envision that in the future as an individual, you will always have control of your finances through their mobile device,? Mr. Van Dyke said.

?As mobile marketers understand how that trend is evolving, they will use programs to foster customer acquisition,? he said.

Final Take
Lauren Johnson is editorial assistant on Mobile Marketer, New York