Participants in a yearlong test being conducted by the Identity Theft Assistance Center say the trial is helping them refine their procedures for dealing with ID theft.
Brian McGinley, the director of loss management at Wachovia Corp., said that as part of the consortium, which was organized in January 2004 by 50 financial services companies, Wachovia has established a single department to handle calls from ID theft victims.
Previously victims may have had to explain their situation several times to people in different parts of the bank, Mr. McGinley said.
The consolidated department’s specialists check a victim’s credit report to spot any suspicious new activity and refer people to the ITAC when needed. The center will then do the same type of detective work.
The new system provides “a much cleaner, better customer experience at Wachovia,” Mr. McGinley said. Many other banks, particularly smaller ones with less exposure to identity theft, have made similar changes, he said.
Wachovia has a lot of experience with identity theft, but working on its own has limited its ability to help customers with broader problems, Mr. McGinley said.
Fostering collaboration was one thing the organizers of the Identity Theft Assistance Center had in mind.
“We think of financial crime as something of a noncompetitive arena — everyone suffers,” Mr. McGinley said.
The Washington-based group, which is about midway through the test, sees itself as a one-stop consumer protection shop.
Consumers have “no idea” what to do once their personal information has been compromised. “ITAC can assist them in that process,” said Stan Ommen, the center’s chairman and the president of State Farm Bank FSB of Bloomington, Ill.
ITAC members have agreed to streamline their processes so that customers talk with as few people as possible — ideally, one — about a suspected identity theft.
The ITAC’s definition of identity theft includes only criminals opening new accounts under a victim’s name. Other groups also include takeovers or fraudulent use of existing, valid accounts.
A single incident often involves several companies; an account at one bank could be drained, a credit card issued by another bank could be hijacked and used to make purchases, and the victim’s information could be used to apply for a loan at a third bank.
The center works with, among others, the FBI, the Secret Service, the Department of Justice, the U.S. Postal Inspection Service, and the Department of Homeland Security. It also reports identity theft to affected companies that are not ITAC participants, though they are not told the full extent of each incident.
ITAC president Steve Bartlett, who is also the president and CEO of the Financial Services Roundtable, said that though only half the cases reported to the ITAC involve frauds at multiple financial institutions, a good number involve at least nine companies.
“When a good thief gets busy, he gets really busy,” Mr. Bartlett said.
Wachovia, Wells Fargo & Co., and MBNA Corp. generate the most referrals to the ITAC, though the executives would not say how many people use the service.
Mr. McGinley said that only 15%-18% of the people Wachovia refers to the center actually use it. The number might be so low because “customers initially thought we were trying to sell them something,” he said. Wachovia’s representatives now stress that the service is free.
Though participating banks must investigate each case before sending it to the ITAC, Mr. McGinley said that as many as 75% of the referrals turn out to involve legitimate accounts.
Typically this happens when customers review their credit reports and misidentify valid accounts as bogus ones. For example, Mr. McGinley said, a Wachovia credit card will actually appear on a credit report as an MBNA card because Wachovia’s card operations are managed by MBNA.
Anne Wallace, the ITAC’s executive director, said 87% of the customers it works with are “highly satisfied.”
Catherine Allen, the chief executive of BITS (the technology arm of the Financial Services Roundtable) and the ITAC’s vice president and treasurer, said that creating a referral process, standardizing procedures for different companies, and even creating a common format for paperwork so victims do not have to fill out several forms with the same details have all helped make an inherently frustrating process simpler.
The center is handling fewer cases than it expected to, Ms. Allen said. Though this could be a good sign – an indication that the participating companies are properly evaluating reports and not making inappropriate referrals — it could also mean that fraud is getting harder to spot.
A recent report from ID Analytics Inc., a San Diego software company, said 88.3% of identity theft cases involve a combination of real and fictitious identity details.
For example, the criminals may use made-up names in conjunction with real Social Security numbers and credit histories. This makes it harder for creditors to track down the fake people on bogus accounts, and also makes it harder for victims to realize that their personal information has been abused.
“There’s so much about identity theft that nobody really knows,” Ms. Wallace said.
