Why go to all the trouble of stealing someone’s identy when banks make it easy to simply make one up? Shouldn’t they be held accountable for the use of that identity to defraud? Perhaps if a bank is held as a codefendent in a fraud case, this might stop. But punishment would have to include jail time because you know a fine will just be termed a cost of doing business and passed on to customers.
US banks lose $50bn to phantom fraudsters
[Gatner] reckons ID theft will claim 10m US in 2005 resulting in losses of around $15bn from 50m accounts. By comparison “victimless” fraud – bad debt run up in the name of non-entities – will hit $50bn this year.
US banks are so keen to recruit new customers they will open up accounts on the basis of identification from only a pay-as-you-go mobile phone bill (a type of account that is even easier to open) without checks on the validity of supplied social security numbers.
What are the banks doing wrong? They are in business to collect deposits and lend people money. Social security numbers aren’t supposed to be used as a national ID card, so why should banks even collect this information? How come you’re OK with government rules for companies with regards to ID theft or immigration but get upset if it’s about terrorism?
ab, banks are supposed to collect social security numbers so that the IRS has a way to track our income. That said, they also use them to ban a person from a checking account (aka CheX). Our social security numbers are not “supposed” to be used as a national id card, however, they are. They’re assigned to us at BIRTH now.
Banks are now int he business to collect fees, overcharge customers, use questionable accounting practices (the major banks take the debits OUT of your account prior to adding in the credits..totally back-ass-wards, but it makes for more bounced check fees). The problem is they’ve cheXed so many potential customers out of the market, mostly because the said customers failed to pay the unbelievable fees (a check can bounce three times..which is over $100 in fees, errors in deposits take 60-90days to correct, the bank will not stop direct withdrawls..like to AOL for 60-90 days, without the debiting company notifying them). Now, the banks are hurting, so they’re looking the other way when people bring in bogus information.
Wish I were kidding.
AB CD,
I agree with you about the over-use of social security numbers. I had a friend in college (circa 1980) who used to give banks hell when they would ask for a social security number. There were times when people believed that the banks could request your SSN at will, and that you had to provide it. It simply was not so. (People pooh-poohed his privacy concerns then; they’re not laughing now.) That said, with the new “Know Your Customer” big-brother laws (Patriot Act), requirements have theoretically tightened even more– though from Dave’s post it appears that the taking of a social security number doesn’t amount to much, if they don’t even verify its validity.
Anyway, I read an article a couple of weeks ago which gave a brief overview of the time-line of SSN use. 1961 was a pivotal point on the slippery slope to overuse and abuse of SSNs. (Thank your representatives in Washington.)
A passage from the article and a link:
“The first Social Security numbers rolled out in late 1936. In 1961, Congress permitted the Internal Revenue Service to use the numbers to identify taxpayers. Besides those two agencies, you must also provide it to those required to collect income and tax-related information on behalf of the IRS. That includes banks and financial institutions that give interest income information to Uncle Sam and employers that report earnings and Social Security taxes.
As part of a federal law in the mid-1990s to improve collection of child support, states require Social Security numbers on license applications, whether it’s for hunting and fishing, marriage and driving or professional licenses. And as a result of the Patriot Act of 2001, banks must verify the identity of new customers and most do so by using Social Security numbers, said John Hall, a spokesman with the American Bankers Association.
In 1974, Congress limited the use of the numbers by federal agencies because of privacy concerns, but the law didn’t apply to private businesses or states, experts said. The use of Social Security numbers became widespread, appearing on driver’s licenses, insurance cards, student IDs and even gym memberships.
Quoted from… http://tinyurl.com/c374s
And Meetsy is right about the banking industry.. Today’s banking *is* fraud.
My wife and I have had our credit cards used fraudulently three times in the last almost 15 years. In at least one case, we had a pretty good idea who did it (a bank employee!). In another case, I think the person could have been discovered with only a little investigation.
But as far as I can tell, the credit card companies DID ABSOLUTELY NOTHING to investigate the cases. They refunded us our money, gave us new cards and let the issue drip. As far as I’m concerned this lazy approach to credit card fraud makes the card companies complicit in the problem.
With the coming issuance of RFID Mastercards and such, how significant is the threat that the information contained can be surreptitiously obtained, say when you are standing in a check out line with it in your hand.
I say they embed your DNA code in the magstipe
Tom,
I remember reading that too… that the RFID chips the US Gov was proposing to put in our passports could be read by some crimminal as you walked passed him.
If I remember correctly, the government didn’t deny this because they then said they would create a metalic cover for the passports which would shield the chip inside.
So, I imagine, metal walletts (or pants!) are going to become a necessary fashion.
It seems like these RFID — as currently designed — will greatly amplify the problem of keying in a PIN at an ATM. Now we have to worry everytime we even have a card in our hand.