The Federal Deposit Insurance Corporation (FDIC) is suggesting financial institutions prevent online theft by asking customers for more than one password to access accounts, by improving software and alerting clients.
The Federal Trade Commission has estimated that in 2003 identity theft caused billions of dollars in losses. The maximum penalties in case of conviction of a $250,000 fine or 15 years in prison are not deterring criminals.
Schemes involving "phishing," or sending massive e-mails that pose as being from the receiver's financial provider, continue to increase. Those who fall for the scam and provide their account information and passwords can find those accounts emptied quickly. The FDIC cited a study last year that said phishing rose 4,000% within a five-month period.
The FDIC suggested systems should be upgraded so that a separate means of "authentication" is used in addition to one password. Also, financial institutions suggested software should be designed to identify scams and boost protection.
The FDIC also suggested educating customers to alert against scams and getting the financial industry to cooperate with government and technology providers to better fight crime.
