A new survey says that an alarming number of Australians are becoming victims of online identity theft, an industry that made an estimated $1.3 billion over the past year.

The survey found that about one in every 10 Australian residents had been a victim of online identity theft in the past 12 months. There were 2500 respondents to the survey.

According to the survey, which was compiled by Galaxy Research for online security company Verisign, each person lost an average of $1000. This means that about 1.37 million Australian Internet users have been the victims of fraudsters.

One of the most common methods of identity theft is "phishing" emails. Fraudsters pretend to be affiliated with financial institutions to gain personal information of users.

Another way of committing fraud is by sending out emails containing sad stories, which is meant to deceive users into sending over cash or bank details. About 60 per cent of respondents say that they encountered fraudulent emails and websites in the past year.

The survey found that complacency contributed to the prevalence of identity theft. Around 69 per cent of users aged 18-24 admitted that they failed to check for security features every time they gave out information such as bank and credit card details.

People over 50, on the other hand, were more security savvy. About 45 per cent of respondents in the age bracket regularly check for online safeguards.