WASHINGTON - Regulators are advising bankers to tighten their defenses against identity theft and other privacy invasions.

In letters sent Monday to bankers, the Office of the Comptroller of the Currency and the Federal Reserve Board issued customer information security guidelines as required by the Gramm-Leach-Bliley Act.

They advised bankers to verify customer account information with third-party sources, such as consumer reporting agencies; verify change-of-address requests; maintain adequate security standards; and use encryption technology when storing or transmitting electronic information.

The recommendations clarify joint guidelines issued by the four financial services regulatory agencies on Jan. 17. The Federal Deposit Insurance Corp. and the Office of Thrift Supervision are expected to issue similar follow-up guidelines this week.

Laws have been enacted in recent years to curb identity theft and related crimes, including the Identity Theft and Assumption Deterrence Act, which Congress passed in 1998. That law made it illegal to knowingly use another person's identification with the intent to commit a crime, such as credit card fraud.

However, authorities say more than 500,000 consumers were still victimized by identity theft last year.

Amy Friend, the OCC's assistant chief counsel, said banking regulators "were strongly encouraged by the law enforcement community to issue this guidance, because banks really need to step up" their detection efforts.

The letters also address a practice known as pretext calling, in which financial information is obtained about a person under false pretenses. For example, an information broker may obtain confidential data about a person by impersonating that person, or a spouse or lover.

Gramm-Leach-Bliley made the practice a federal crime punishable by fines and up to five years of imprisonment.

Bankers were encouraged in the letters to limit how much information they disclose over the telephone; train employees to spot fraud; and test information security systems.


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