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Last Updated:  Friday, 7 March, 2003, 17:02 GMT
Bank fraud risk from ID theft
A sample UK ID card
Who's to say this is really you?
Enterprising crooks are pulling off multi-million pound bank frauds using the same tactics deployed in stealing credit card details, investigators have warned.

Moreover, the increasing focus on "knowing your customer" - identifying who really owns a bank account - when the account is opened could be cutting into checks and balances further down the line.

Scammers have long used discarded credit card information - receipts, junk mail card offers and so on - to steal from cardholders or to help in other kinds of identity theft-related crime.

There's a real risk of going from the sublime to the ridiculous, with draconian policies that don't necessarily do the job
Jon Merrett, CCB assistant director
But according to the International Chamber of Commerce's Commercial Crime Bureau, similar techniques have made millions for con artists who know how to manipulate the way banks work.

"This is a new variation on the rising problem of identity fraud that is ruining the financial lives of people around the world," John Merrett, CCB assistant director, said.

Just checking

The CCB, which among other tasks is hired by banks and other big institutions to check out the parties to potentially dubious transactions, has several examples of major bank fraud based on identity theft.

In one case, a forged letter to a customer from their bank - on a forged letterhead - asked for personal details which it claimed the bank was required by law to reconfirm for tax purposes.

The next move was an attempt to use the information to transfer 86,700, a scam only stopped because the bank remembered to phone the customer to confirm the transaction.

In another case, unfortunately, a $1.4m transfer to two offshore accounts with Greek beneficiaries went through, because no-one noticed till the loss was reported.

Out of the frying pan

Governments in the US and elsewhere are taking identity theft increasingly seriously following recent incidents which saw millions of credit card users' personal data being stolen.

And the new attention paid to money laundering and funding used for terrorism is also helping - in theory.

But in practice, limited resources mean that the fresh focus on "knowing your customer" when he or she walks in the door could be cutting into checks made once an account is active, Mr Merrett acknowledged.

"There's a real risk of going from the sublime to the ridiculous, with draconian policies that don't necessarily do the job," said Mr Merrett.

Although most UK institutions are rechecking customer information periodically, some might be tempted to spend scarce resources on the upfront checks required by law and skimp on the day-to-day safeguards, he warned.


SEE ALSO:
Visa moves on identity theft
07 Mar 03 |  Business
BT scheme to fight ID fraud
04 Mar 03 |  Technology
Briton may sue after FBI bungle
26 Feb 03 |  England
Bin raiding: The growing scourge
09 Mar 02 |  Business
Losing your identity
18 Dec 02 |  Business
FBI busts identity theft ring
26 Nov 02 |  Business


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