SAN FRANCISCO-During 2008 the top 25 U.S. banks have shown improvement when it comes to resolving cases of identity theft, but ongoing vulnerability in prevention and detection, according to a new study from Javelin Strategy & Research.
Javelin's just-released 2007 Banking Identity Safety Scorecard is an annual ranking of the top banks when it comes to ID theft, and this year is recommending that banks provide more account monitoring tools to its customers and empower them to "watch and catch" identity fraud earlier.
The 2007 Scorecard ranked Bank of America highest, earning 78 points out of a total possible score of 100. Tied in second place were JP Morgan Chase, Washington Mutual and Wells Fargo, each earning 70 points. Citibank ranked third with 69 points; BB&T and Wachovia earned the fourth and fifth highest scores.
On the whole, the average financial institution met 77% of the recommended resolution criteria, but showed slower progress in detection and prevention measures, Javelin said. In the 2007 Scorecard, the average bank achieved only 44% of Javelin's recommended prevention standards and 51% of the detection criteria.
"Banks have done a great job treating the symptoms of identity fraud with their resolution policies, now we urge them to treat the problem," said Jean Garascia, an associate analyst with Javelin Strategy & Research. "They must empower customers from the start. Offer them text message account alerts and two-way messaging; let them set limits and parameters on their accounts. The sooner banks provide these tools, the sooner their customers will become identity fraud watchdogs."
James Van Dyke, president of Javelin Strategy & Research, said that "account-holders are the best resource for detection," noting Javelin had found that 48% of fraud cases were detected by victims, not their financial institutions.
Key Findings
Among the key findings in the ID theft study by Javelin Research:
* Multi-factor authentication (MFA) systems in online channels are active in 88% of banks; MFA are active in 48% of phone channels and 12% in mobile channels.
* User-Defined Limits and Prohibitions (UDLAP) are available in 36% of surveyed financial institutions.
* 76% of banks and CUs require the use of full Social Security numbers.
* 88% of surveyed banks offer transaction alerts, 56% offer personal information change e-mail alerts.
* 28% of financial institutions offer text message alert capabilities, none offer two-way messaging.
* 88% of banks maintain a zero liability identity fraud policy for all purchases and transactions.
* 24/7 account suspension is available in 60% of surveyed banks, 40% offer next-day availability of stolen or compromised funds.
For info: www.javelinstrategy.com/research.
