Identity theft may be happening less often, but victims are paying a higher price.

Last year, the number of identity thefts fell 28% to 8.1. million, from an estimated 11 million in 2009, according to a recent survey from Javelin Strategy & Research. This was the sharpest drop in the history of the eight-year study. It also found the odds of being hit by identity theft fell to 3.5% in 2010 from 4.8% in 2009. The total annual reported fraud also fell from $56 billion to $37 billion. The study questioned 5,004 consumers via a standardized phone survey. From that polling, 466 fraud victims were interviewed.

Despite the drop in instances, those who suffered from identity theft last year faced higher consequences, the study found. The average out-of-pocket loss nearly doubled, going from $387 to $631 per incident. Consumers also reported spending an average of 59 hours recovering from a “new account” instance of ID theft, up from 41 hours in 2009.

Brian McGinley, SVP of Data Risk Management at Identity Theft 911, said much of the data in this study can be pegged to the financial meltdown and contraction of credit. Many fraudulent credit card applications and activity began getting declined due to the crisis. Therefore, fewer identities were stolen through fraudulent accounts.

“One of the proliferators of identity theft is opening up new accounts,” McGinley said. “If your ID was stolen, or you weren’t credit worthy, under new and higher standards those applications were getting turned down, along with many legitimate applications.”

The higher cost rates come along with the complexity and time it takes trying to unwind identity theft and fraud today, McGinley said. However, in recent years more investments have been made to protect consumers.

“More investments have been made by financial communities and others to protect data, and we are getting better and seeing the manifestation of that,” he said.

Facebook and Twitter users should pay closer attention to their credit reports, as consumers who have used social media tools for at least five years were twice as likely to be victims of identity theft, the study found.

Follow Kate Rogers on Twitter at @KateRogersNews