The Biweekly Newspaper of
the American Bankers Association
Volume 9, Issue 12 – June
12, 2001
By John
Ginovsky
Every day, banks get calls from local merchants wanting to know if their customers’ checks are good. How can banks serve this need without falling afoul of identity thieves’ pretext calls?
The banking agencies, in recent advisories, recommend several methods including using authorization codes, caller identification services and by asking for call-back numbers.
Robert Douglas, CEO, American Privacy consultants, Alexandria, Va., favors all of these measures, especially the use of authorization codes.
Having advised many financial institutions about identity theft and pretext calling, Douglas noted that “banks that have password identification numbers or passwords protecting customer information are succeeding in thwarting identity thieves from improper access. Banks that don’t have those systems and continue to use mother’s maiden names, Social Security numbers or amounts of last deposit, are literally wide open to identity thieves.”
Such systems can be set up by having the bank issue the personal identification numbers and passwords, or by having customers choose them. This later method tends to be the more user-friendly, Douglas said, making it easier for the customer to remember them without writing them down. Care must be taken not to use any biographically relevant numbers, such as birth dates.
With caller identification, bank employees can quickly check the number showing on the telephone with the number on file. If they don’t match, the information should be withheld until other verification measures can be taken.
Similarly, if a caller refuses to provide a call-back number, or if the number does not match the one kept on file, information should be withheld.
While all the federal bank regulators
issued advisories recently on identity theft and pretext calling, the one
issued by the Office of the Comptroller of the Currency is particularly
detailed. For a copy, fax a request to ABA’s John Ginovsky at 202-663-5464 or
e-mail him at jginovsk@aba.com.
(Reprinted with permission of
the American Bankers Association)