Regulators propose bank rules to curb ID theft
WASHINGTON (Reuters) – U.S. regulators on Tuesday said they
plan to require all banks to develop an identity theft
prevention program for customers that includes “red flags”
about suspicious account activity.
The new practices would also require credit and debit card
issuers to assess the validity of a request for a change of
address which is followed by a request for an additional card,
the Federal Deposit Insurance Corp. said.
The proposed regulations would require each bank, thrift
and creditor to adopt procedures for detecting, preventing, and
mitigating identity theft. The programs must verify the
identity of a person opening a new account, and include red
flags that can signal possible risks when accounts are opened
The FDIC, along with the Federal Reserve, the Office of the
Comptroller of the Currency, the Office of Thrift Supervision
and the Federal Trade Commission, is accepting public comments
on its proposed rules through mid-September.
The regulators said banks and creditors face several risks
to their “safety and soundness” when customers are the victim
of identity theft. Banks can be sued for failing to protect
customers and incur costs from absorbing losses to victimized
customers, they said.
Identity theft is one of the fastest growing types of
consumer fraud. The FTC estimated that during 2003, almost 10
million Americans were victims of various forms of identity
theft, with a total cost to businesses and consumers of more
than $50 billion.
A bill is pending in the U.S. House of Representatives that
would set standards for consumer rights when personal financial
data is stolen. Critics say the bill’s proposed federal
standards would weaken standards that now exist in 18 states.
The new proposed rules for banks and creditors were posted
on the Internet at