- advertisement -
Financial Literacy - Protecting your identity Click Here
SPOTLIGHT
Banks: Fess up
Financial institutions should have to publicly report basic statistics on their fraud rates, says this privacy law expert.
Protecting your identity

Spotlight: Chris Jay Hoofnagle

What's also important is that regulators' resources are focused on problem companies. For instance, looking at the overall incidents, 50 percent of the complaints that the FTC received in those three months concerned just 25 companies. It's pretty obvious that a good investment of regulators' attention -- and it doesn't necessarily have to be enforcement actions, it can be outreach, it can be investigation -- would be figuring out why these companies figure so prominently here. I think that there's a tremendous opportunity for education and intervention among regulators, and that's part of the market, too.

Consumers: Be on high alert
Prevalence of ID theft
Identification/authentication
ID theft losses
Phone company ID theft
Benefits of banks reporting fraud
Protection for consumers
Weird impulsivity
Recent improvements

Do you think that there should be government regulation to prod financial institutions into reporting identity theft data?

It would help for there to be baseline reporting requirements, in part because the reporting has to be truthful. A lot of people have written in response to this report, and said what you ought to do is measure these things by the number of customers they have, and my response to that is, "Well how do you know how many customers they have?" And they say, "Oh you just go to the 'About Us' Web page for the bank."

You can't really (trust that number) -- that representation is more about marketing than something you file with the FDIC -- something that a board member signs and says, "This is truthful." So I like the latter, not the kind of puffing that one sees online.

How do banks find out about identity theft?

That's another huge issue, I'm not sure that they always do. That's evidenced by the number of (credit card) accounts that are turned over for collection. Obviously, they think that it is a legitimate account and it's just a deadbeat. That is a serious problem that has to be overcome, effectively identifying accounts that are related to fraud.

And going along with that, what should they be doing to protect legitimate customers?

Well, it depends on the type of risk involved. In new-account theft, there have to be better practices around authentication. There is a series of cases known as the negligent enablement of identity theft cases, where fraudsters get new accounts even though they've written down everything on the application incorrectly except for the Social Security number.

So I think on the new-account basis, the primary issue is new customer authentication. There are so many incentives to sign up new customers that authentication isn't taken as seriously as it should be.

-- Posted: April 21, 2008
Page | 1 | 2 | 3 | 4 | 5 | 6 | 7 |




TABLE OF CONTENTS
 
 
 
 
 
 
 
 
   
 
 
 
 
 
 
 
- advertisement -
- advertisement -
- advertisement -