The 2008 Identity Fraud Survey Report from Javelin Strategy & Research indicates that most identity theft occurs not online, but through stolen belongings, mail and telephone calls.

The use of the telephone for
fraud has risen sharply. Telephone calls and mail were responsible for
3% of identity thefts in 2006. In 2007, that grew to a whopping 40%.

Overall, the report found that identity theft is on the decline. In
2007, 3.6% percent of US adults were victims of identity fraud, down
from 4.25% in 2006.

Similarly, criminals made away with $51 billion in 2007, down from
$54 billion in 2006. Javelin attributes the drop to greater consumer
vigilance and awareness.

However, Javelin also found that, while total fraud is on the
decline, the total out-of-pocket expenses borne by victims is on the
rise. The average cost per consumer in 2007 was $691, up 25% over the
$554 in 2006.

Via Javelin Strategy & Research