TechWeb

Banks Plan For Identity Theft Assistance Center

Jan 30, 2004 (09:01 AM EST)

Read the Original Article at http://www.informationweek.com/news/showArticle.jhtml?articleID=17600088


With identity theft on the rise, an association of large banks called the Financial Services Roundtable is forming the Identity Theft Assistance Center to help victims. Wells Fargo & Co. will operate the center, scheduled to open in May, with other financial institutions participating on a voluntary basis.

Consumers who believe they're victims of identity theft won't interact with the center directly, says Cheryl Charles, senior director of BITS, the technology research arm of the Financial Services Roundtable. Instead, they'll contact an ombudsman at their bank who'll contact the center. The center will gather information from consumers, credit bureau reports, and other sources, and determine whether consumers' accounts have been compromised. It will also work with law-enforcement agencies.

At a cost of $1.5 million, the Identity Theft Assistance Center is one element of the financial-services industry's plan to combat ID theft; another is the use of a uniform affidavit for recording information about ID theft and establishing a single point of contact.

Last week, the Federal Trade Commission released statistics from its Identity Theft Data Clearinghouse showing that 215,000 people had their identities stolen last year, up from 162,000 in 2002. A third of the thefts were used to perpetrate credit-card fraud, while 21% were used for phone or utilities fraud. Other categories included bank fraud, employment-related fraud, government documents or benefits fraud, and loan fraud. About 19% of thefts were used to perpetrate multiple types of fraud.

Financial institutions are getting better at preventing ID theft through improved training and screening, and the use of fraud-detection software that can spot suspicious activity at the point where it's most likely to occur: the opening of new credit-card and checking accounts. That may ease the burden on victims, who are often the first to notice that their identities have been stolen, usually after damage has been done. Says Charles, "A lot of the cases that get solved through [the Identity Theft Assistance Center] will be initiated by the financial institutions themselves rather than the victims."