FDIC: Banks Must Warn Consumers Of Identity Disclosure

The Federal Deposit Insurance Commission (FDIC) voted 5-0 today to approve a ruling forcing banks to notify customers when their Social Security number or other identification numbers may have been released or misued by external entities.

The action comes on the heels of Bank of America's admission that it had lost data tapes with personal records of 1.2 million individuals.

The FDIC ruling, if approved by the Federal Reserve, could cause a significant increase in identity theft disclosures," said Jim Stickley, Chief Technology Officer of TraceSecurity in a prepared statement. "Today, most large-scale identity thefts go unreported, either because the bank wants to avoid tarnishing their reputation or because they are simply unaware of the breaches. Many banks employ archaic data privacy practices that haven't kept pace with the evolving threats. The exploits of identity thieves, however, which are often coordinated by international crime syndicates, have become increasingly creative and sophisticated. Many banks are caught in a catch-22 situation: Their customers are demanding greater online access to a broader range of financial services, yet as banks make their services available online to customers, they're also making them available to thieves."

posted by Consumer Help Web Editorial Team at 8:53 PM |