WASHINGTON - In a bid to reduce fraud, the Federal Reserve Board no longer will require banks to include a customer's entire account number on an automated teller machine receipt.
Instead, banks can truncate account numbers, providing only enough information to let the customer know from which account the money came.
The Fed's decision, announced Wednesday, makes permanent a three-month old interim rule. The change garnered widespread industry support.
"It ensures greater customer protection," said Wayne Boucher, president of the Electronic Funds Transfer Association. "It frustrates attempts by some characters to beat the system. And, it will save a lot of money by reducing fraud and theft."
Mr. Boucher said criminals are "shoulder surfing" to learn a consumer's ATM access code. They then pick up the discarded receipt and use the account number on cards they make.
"By truncating the account number of the receipt, that becomes nearly impossible to do," Mr. Boucher said.
The Fed also finalized new rules for high-rate, high-fee, and reverse mortgages.
For reverse mortgages, creditors must calculate the cost of payments on an annual basis, accounting for how quickly the home appreciates, and how long the borrower is expected to live.
The information is intended to help consumers understand the true costs of reverse mortgages, a transaction in which a consumer can draw down the equity in his or her home by receiving monthly payments. The creditor then sells the home upon the customer's death to recoup its costs.
The central bank also placed restrictions on mortgages whose rates are more than 10 percentage points above those on the comparable Treasury instrument, and those with fees exceeding the greater of 8% of the loan amount or $400.
The rules, which do not cover purchase mortgages, apply to home equity loans and second mortgages.
