MONEY MATTERS

Financial identity theft has been on the rise since the 1980s, in part because credit card companies began mass-mailing preapproved card applications directly to consumers. Many of these applications wound up in the trash. All an identity thief had to do was recover them and claim the credit cards. From a single card it was possible to create an entire financial profile in someone else’s name. In the 1990s, as banks and consumer database companies moved their business online, identity theft became even easier to commit. In 2003, thieves struck a reported 10 million people, according to the [US] Federal Trade Commission, but the actual number of victims is thought to be far higher, since the crime typically goes undetected for years. Because this brand of larceny is mostly a virtual crime, and thieves leave little or no physical evidence, identity thieves are rarely caught. Fewer than one in 700 identity thefts are even investigated. But the cost is very real to financial institutions and other businesses, which usually absorb it – $47.6 billion in 2003.
The banks are in a tough position, they are torn between customer service and security. They want to make it easy for customers to access information, to see their accounts online. But that also makes it easy for criminals.

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