Identity Thefts in Banking Industry

What your bank should be doing to protect you from ID theft

A person we know suddenly learned he was a debit-card identity theft victim - while his debit card was locked in a bank safe deposit box. He immediately informed his debit-card issuer, a major bank, but the branch rep said there was nothing she could do. We directed him quickly to an identity theft hotline, buried on his bank's Web site.

Such a slow response by your bank could lead you to suffer a greater financial loss if an identity thief targets you. So it could pay when you open your bank account to find out exactly what steps your bank takes to curb identity theft. While many credit and debit-card accounts promise consumers zero liability if their credit or debit card is lost and stolen, that doesn't mean you can't suffer. Your bank may not buy your story and you may be forced to hire an attorney. Many victims don't prosecute because thieves often are family members. So you still could suffer un-reimbursed financial losses, lost wages and legal fees.

• Warning: Some 12% of major banks lack a zero-liability policy for debit cards that require access via a personal identification number or PIN, according to Javelin Strategy. So learn how your bank protects against identity theft, particularly before opening a PIN-accessed debit card. In USA, federal law limits card holder’s losses on a lost or stolen credit card to $50. In India there appear to be no such guidelines. Even if there is one, it is not widely publicized. You may have some protection for credit / debit cards - provided that you promptly notify your bank.

Nevertheless, losses when your identity is stolen, according to Javelin's 2008 Identity Fraud Survey Report, can escalate the longer the fraud goes undetected. Victims who detected the fraud within one day spent an average of $428. But those who took up to five months lost three times as much -- $1,207, its report says. Meanwhile, if somebody opens a new account in your name and nobody contacts you, you risk suffering greater losses. You might not hear about it until a debt collector calls or you're suddenly denied credit. This gives thieves a maximum amount of time to do their damage.

• Your bank can take precautions:

There are certain things your bank can do to nip an identity theft in the bud. It could pay to make sure your bank takes certain precautions, advocated in the Javelin Strategy survey:

• Provides you with the ability to create restrictions -- either online, by phone or in-branch -- on particular transactions. Don't think you'll ever conduct any wire transfers outside the United States? Bank only with institutions that let you limit those transactions.
• Eliminates distribution of your personal information and limits use of your Social Security number to the last four digits.
• Offers to email or text message you if there's ever a change of personal information, including a change of address, addition of a cardholder or unusually low balance on your account.
  Has a centralized fraud resolution department.
• Lets you quickly freeze your account.
• Requires at least two ways to confirm your identity both by telephone and online banking.
  Regularly educates employees on how to properly secure sensitive information.
  Regularly examines employees for insider collusion.
• Encrypts your personal identification numbers, passwords, Social Security numbers and other private data.
• Uses no hyperlinks in emails. This way, you can determine which emails don't come from your bank.

Meanwhile, Javelin Strategy reports increased theft via mail order or telephone order purchases. It cites a newer tactic, "Vishing," or using the Internet to place phone calls. Internet-placed calls are tougher to trace.

Bottom line: Never provide personal information -- even over the telephone. If you get a communication from your bank, call only the telephone number you already have -- not the one in the communication.

ID theft up or down?

It seems comforting that Javelin Strategy reports a 12% decline in identity theft in 2007. But not everyone agrees with that company's study, sponsored by Visa, Wells Fargo Bank and CheckFree Services Corp.

For one thing, the Federal Trade Commission reports a 32% rise in identity theft complaints to 258,427 during the 2007 calendar year. Plus, Chris Jay Hoofnagle, senior fellow at the University of California-Berkeley law school, complains that consumers, regulators and businesses have no reliable way to assess identity fraud at major financial institutions.

"Lending institutions should publicly report basic statistical information about identity theft events," he says. Information they should disclose: The number of identity theft events suffered or avoided; the form of identity theft attempted; the targeted product, such as a mortgage loan or credit card; and the amount of loss suffered.

Pakistan's Role in terrorism: is it inadvertent

Pakistan can not perennially play fall-guy and try winning international sympathy. It has all the symptoms and signs of failed nation. It can be an international responsibility, least of all of India to ensure that it gets stable government or that there is good governance there. When it fails completely and disintegrates, some of the fragmented territory (rather is big chunk) will inevitably join with India. Till this happens, we in India can at least accelerate the process and send befitting reply to Pakistan for all its misadventures so far by doing to it what it has been doing to us so far! What is Pakistan today – state with poor governance, religious Zionist calling the shots there, weak economy etc. And where terrorism grows? Consider following observation -

“States with poor governance; ethnic, cultural, or religious tensions; weak economies; and porous borders will be prime breeding grounds for terrorism. In such states, domestic groups will challenge the entrenched government, and transnational networks seeking safe havens. At the same time, the trend away from state-supported political terrorism and toward more diverse, free-wheeling, transnational networks - enabled by information technology - will continue. Some of the states that actively sponsor terrorism or terrorist groups today may decrease or even cease their support by 2015 as a result of regime changes, rapprochement with neighbors, or the conclusion that terrorism has become counterproductive. But weak states also could drift toward cooperation with terrorists, creating de facto new state supporters.” from the National Intelligence Council's "Global Trends 2015: A Dialogue About the Future With Nongovernment Experts" report (December 2000).

The mid-sixties saw smuggling of gold turning out to be very lucrative business of the underworld. It soon became the narcotics which was most sought after item for smuggling. Soon arms, narcotics and havala trading became lethal combination and small time smugglers no more operated independently. They were used by the international big-timers to work for them. And soon corporate culture was emulated by these smugglers / terrorists combine with overseas operation and global presence.

The D - Company has run its business from other countries using its front men and small time operatives. Thus smuggling and mafia activities in India and elsewhere are run like a corporate business. The terrorism have also started undergoing the same changes and if early indications are to be believed, the LeT, JeM or many other terrorist outfit operating from Pakistan need not get its cadre directly involved as local ‘talent’ is easily available. So ‘terrorism’ is being out- sourced as any ‘Corporate’ will out source house-keeping and maintenance services. Similarly terrorists are also more and more getting involved in real estate, havala trading and smuggling as their business verticals so that loss of one business can be absorbed by other business activities or one business can be funded by the profits of other businesses – mostly the terror operations in theirs case!

Why Mumbai terror act can not be brought to International Court of Justice?

The UN has been striving for decades to find a wording for terrorism which, instead of "all its forms and manifestations", narrows down to a specific profile of violence which can be condemned regardless of the circumstances. The absence of an agreed definition matters for many reasons. It blocks the possibility of referring terrorist acts to an international court, as for genocide and other war crimes; it leaves individual countries free to outlaw activity which they choose to classify as terrorism, perhaps for their own political convenience; and crucially it enabled the Bush administration to conjure in the public mind parallels between the 9/11 destruction of the World Trade Center and the Iraqi regime of Saddam Hussein. The vocabulary of terrorism has become the successor to that of anarchy and communism as the catch-all label of opprobrium, exploited accordingly by media and politicians.

The Precipice of Fear

Global terrorism threatens to undo a generation of multilateral endeavor for human development, inspired by principles of social justice and human rights. Foreign aid budgets are struggling in the wake of security priorities. Whilst there have been no major terrorist incidents in the US since 2001, the US counter-terrorism budget for 2008 is $142 billion, a figure which dwarfs the shortfall in annual funding required to meet the Millennium Development Goals which would assist almost a billion people in extreme poverty. Such dysfunctional spending priorities as in USA budget are evidenced in Indian Budget also and reflect the imperative of calming a country’s collective fear, the soft underbelly of emotion that terrorists are most adept at exposing.

A window of opportunity may exist for a new approach. There are few potential new leaders in India and Pakistan who might bring more resolve to implement the roadmap to long-lasting peace. Perhaps the blunt instruments of eavesdropping technology and counter-terrorism laws will give way to more intellectual exposure of the al-Qaeda ideology for its medieval undertones and deep anti-Semitism. In Indonesia, success against JI has been attributed in part to the advocacy work of converted terrorists to “de-radicalize” their former colleagues in prisons. A UK government programme, Preventing Violent Extremism, is dedicated to “winning hearts and minds” in a civic environment.

Nevertheless, real doubts linger over the capacity of politicians. The fundamental adjustment of attitudes necessary to neutralize terrorism can perhaps be engineered only by good citizenship. We may need to devote more energy to the integration of mixed ethnic communities and to the inequalities that are inseparable from modern economics. If we cannot convey to politicians that global fairness, peace and human dignity matter more than the comforts of consumerism, then our fate may indeed be akin to the vision of Shelley's The Mask of Anarchy in which the English poet reacted to British government-sponsored violence in 1819:
And each dweller, panic-stricken,
Felt his heart with terror sicken....