Online Fraud & Identity Theft

(www.bankersed.com)

Since the release and deadline of the Identity Theft Red Flags Rule, we have seen an increase in online fraud. This prompted the FDIC to issue a special alert on August 26, 2009, concerning fraudulent ACH Funds Transfers. The NCUA also issued an alert warning of a fake CD scam, where a letter and CD are being sent to credit union employees claiming the letter is from the NCUA and the CD contains important training information. The CD purportedly contained malicious code. These events are the most recent in an onslaught of attacks against financial institutions and consumers, which further emphasizes the need to have strong fraud and security programs in place like the Identity Theft Red Flag program, incident response plans, and information security programs.

This presentation explores recent frauds and provides guidance into what your institution should be doing to thwart them. We will also review the June 11, 2009, Red Flag FAQ issued by the agencies and other programs you have (or should have) that work in conjunction with the Red Flags Program. The FAQ was issued to help financial institutions and others comply with the federal regulation on identity theft and discrepancies in changes of address. The rules require financial institutions and creditors to develop and implement written Identity Theft Prevention Programs and require issuers of credit and debit cards to assess the validity of notifications of changes of address. It is important to be aware of new threats and risks and adjust your red flags to ensure adequate controls including prevention, detection, monitoring, and training.