The Star System automated teller machine network is working with California's Department of Motor Vehicles to design a system for detecting counterfeit or stolen driver's licenses that are being used as identification for bad checks or credit cards.
Wells Fargo Co., Sanwa Bank, and BankAmerica Nevada, are among those that have agreed to test the multimillion-dollar system early next year. The three banks are part of Star Chek, a Star System service designed to reduce losses from bad checks.
These banks have a computer link to Star Chek, a data base containing all demand-deposit accounts of participating institutions, the status of the accounts, and their ability to accept debit. But the system cannot detect counterfeit checks.
So that San Diego-based Star System, in conjunction with the Departments of Motor Vehicles, wants to tie that data base with another data base containing a copy of the Department of Motor Vehicles' data base of licensed drivers, to be updated periodically. Star's data base will also keep track of whether the holder of a given driver's license has passed any bad checks.
Star also has put out a bid for terminal devices to be installed at the teller window that are modified to scan not only bank and credit cards but also California driver's licenses, checks, and currency.
"We won't catch them the first time" that a criminal tries to pass a bad check, said Gerard Milano, president of the California Clearing House Association. "But we might get them the second time."
The licenses, which the state began issuing in late 1990, have a magnetic stripe on the back containing the driver's name, address, birth date, and thumb print. The licenses also have a hologram over the driver's photograph, making the photo IDs harder to duplicate.
Star System wants to install terminals that can match the information on the magnetic stripe on the back of the license against the information on the face of the license.
The Same Source
The new driver's licenses are designed to combat all types of fraud, including instances involving government benefits. And banks are frequently victimized by criminals using stolen identification, Mr. Milano said.
"We're looking at ways to communicate [between banks and the department], because banks are saying they can't get this or that information easily," said Janice Friedhi, manager of the department's newly formed crime and technical service unit.
A Rental Car Model
She said a new program with Hertz could one day provide a model for banks. California offices of the car rental agency now have an on-line computer link with the department. When a California driver rents a car with Hertz, the license is checked for legitimacy. Hertz now rejects 4.7% of all California rentals based on such information.
Over the short term such a system is not feasible for banks, Ms. Friedli said. The cost is too high -- Hertz pays $5 per request.
