Bank privacy issues

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Bank privacy issues

By Credit Federal | Published 12/23/2005

Are banks failing customers on privacy issues?

Source: MarketWatch, by David Weidner

First, the good news. On Tuesday, ABN Amro Mortgage Group announced that a missing computer tape with personal information about 2 million customers had been found.

Whew.

That came just a few days after the company had all but declared the missing tape -- which was full of Social Security numbers, account information and private financial data -- lost for good. As is the case in these circumstances, ABN Amro offered customers "free" 90-day credit monitoring services.

More importantly, the company also has switched the way it transports the information. It's now sending it electronically, and in circumstances where it can't be transmitted, the company is using a "secure courier system."

Had it been an isolated event, one could just chalk up the sloppy work of ABN Amro to one company's lackadaisical approach to protecting its customers. Unfortunately, it was but the latest in a long string of embarrassments in the financial services industry in 2005.

Among the firms that played loosey-goosey with customer information in 2005:
Citigroup lost a box of tapes with personal data for 3.9 million of its customers in June.

At the end of 2004, Bank of America Corp. parted with information for 1.2 million government employees.

And, just to show that financial companies aren't the only ones adept at playing hide-and-seek with your financial well-being, Time Warner Inc. lost 600,000 of its own current and former employees' financial records.

These guys make the government's response to Hurricane Katrina look like the Marshall Plan.

On the cheap.

Each of the cases shares similar disturbing characteristics. Foremost, a couple of the companies relied on shipping companies to handle sensitive material.

ABN Amro leaned on DHL, a subsidiary of the German post office. Citigroup tapped United Parcel Service Inc. Bank of America shipped the information on a commercial airline. Time Warner believes that its data was lost on a truck ride to a storage facility.

Shipping companies in general do a fine job. But think over the last few holidays.

Did everything come to you as planned? Did it arrive on time? Was it all in good shape? For $10 to $20, commercial shipping probably was a good solution for the iPod you ordered from Amazon.com, but it may not be great for information you would keep in a bank's safe-deposit box.

Citigroup once lost thousands of customers' data when it fell off the back of a truck.

Companies may indeed mean well when they enact privacy policies, but they can't guarantee anything when they decide to play the odds by handing over the data to a shipper.

Sure, shippers have an excellent track record in delivering everything including personal data. On the other hand, there are 7.7 million victims who might think that record isn't good enough.

Security breeches aren't a new problem, tracked at about the same rate since 2001, according to the Identity Theft Resource Center, a non-profit organization that helps consumers prevent theft or victims repair the damage. For companies, the greatest risk to losing information is to not send the data electronically or sending it without a human escort, the resource center says.

Let's face it. Those measures are more expensive than sending some computer tapes via UPS. But as anyone who's ever been burned by identity theft can tell you, the cost is well worth it.

Identity theft is dropping a financial bomb in someone's life. The stress of watching some unknown spending your money, ruining your credit can strain people and relationships.

Estimates show identity-theft victims spend an average of 100 hours, the equivalent of 2.5 work weeks, working to repair damage to their credit.

Getting wise

To the public's credit, people are getting wise to the fact that it's prudent not only to safeguard against the criminals, but also to be wary of the companies requesting the data.

More than two-thirds of Americans have lost confidence in the handling of their personal data, according to a survey over the summer by Privacy and American Business and Harris Interactive.

That same survey also showed that 59% of consumers believe existing laws and organizational practices don't provide a reasonable level of privacy protection.

Concerns about privacy also appear to be having a business impact. The survey found that 64% of respondents decided not to buy a product because they were concerned about how personal information could be used.

Unfortunately, that's not a luxury many of us can afford, especially when it comes to financial services. How many mortgages, credit cards and checking accounts are available without a Social Security number?

U.S. money-laundering laws aimed at stemming the flow of terrorist money have made brokerage and insurance accounts -- once relatively anonymous -- now heavy with personal data.

So, it seems only fair that financial firms start protecting the information they request. Those companies, after all, pay a heavy price when their customers spend hours on the phone sorting through charges made by thieves.

It's time to ask financial firms if they can keep a secret.

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Bank privacy issues - by <a href=http://creditfederal.com>CreditFederal.com</a> Are banks failing customers on privacy issues? Source: MarketWatch, by David Weidner First, the good news. On Tuesday, ABN Amro Mortgage Group announced that a missing computer tape with personal information about 2 million customers had been found. Whew. That came just a few days after the company had all but declared the missing tape -- which was full of Social Security numbers, account information and private financial data -- lost for good. As is the case in these circumstances, ABN Amro offered customers "free" 90-day credit monitoring services. More importantly, the company also has switched the way it transports the information. It's now sending it electronically, and in circumstances where it can't be transmitted, the company is using a "secure courier system." Had it been an isolated event, one could just chalk up the sloppy work of ABN Amro to one company's lackadaisical approach to protecting its customers. Unfortunately, it was but the latest in a long string of embarrassments in the financial services industry in 2005. Among the firms that played loosey-goosey with customer information in 2005: Citigroup lost a box of tapes with personal data for 3.9 million of its customers in June. At the end of 2004, Bank of America Corp. parted with information for 1.2 million government employees. And, just to show that financial companies aren't the only ones adept at playing hide-and-seek with your financial well-being, Time Warner Inc. lost 600,000 of its own current and former employees' financial records. These guys make the government's response to Hurricane Katrina look like the Marshall Plan. On the cheap. Each of the cases shares similar disturbing characteristics. Foremost, a couple of the companies relied on shipping companies to handle sensitive material. ABN Amro leaned on DHL, a subsidiary of the German post office. Citigroup tapped United Parcel Service Inc. Bank of America shipped the information on a commercial airline. Time Warner believes that its data was lost on a truck ride to a storage facility. Shipping companies in general do a fine job. But think over the last few holidays. Did everything come to you as planned? Did it arrive on time? Was it all in good shape? For $10 to $20, commercial shipping probably was a good solution for the iPod you ordered from Amazon.com, but it may not be great for information you would keep in a bank's safe-deposit box. Citigroup once lost thousands of customers' data when it fell off the back of a truck. Companies may indeed mean well when they enact privacy policies, but they can't guarantee anything when they decide to play the odds by handing over the data to a shipper. Sure, shippers have an excellent track record in delivering everything including personal data. On the other hand, there are 7.7 million victims who might think that record isn't good enough. Security breeches aren't a new problem, tracked at about the same rate since 2001, according to the Identity Theft Resource Center, a non-profit organization that helps consumers prevent theft or victims repair the damage. For companies, the greatest risk to losing information is to not send the data electronically or sending it without a human escort, the resource center says. Let's face it. Those measures are more expensive than sending some computer tapes via UPS. But as anyone who's ever been burned by identity theft can tell you, the cost is well worth it. Identity theft is dropping a financial bomb in someone's life. The stress of watching some unknown spending your money, ruining your credit can strain people and relationships. Estimates show identity-theft victims spend an average of 100 hours, the equivalent of 2.5 work weeks, working to repair damage to their credit. Getting wise To the public's credit, people are getting wise to the fact that it's prudent not only to safeguard against the criminals, but also to be wary of the companies requesting the data. More than two-thirds of Americans have lost confidence in the handling of their personal data, according to a survey over the summer by Privacy and American Business and Harris Interactive. That same survey also showed that 59% of consumers believe existing laws and organizational practices don't provide a reasonable level of privacy protection. Concerns about privacy also appear to be having a business impact. The survey found that 64% of respondents decided not to buy a product because they were concerned about how personal information could be used. Unfortunately, that's not a luxury many of us can afford, especially when it comes to financial services. How many mortgages, credit cards and checking accounts are available without a Social Security number? U.S. money-laundering laws aimed at stemming the flow of terrorist money have made brokerage and insurance accounts -- once relatively anonymous -- now heavy with personal data. So, it seems only fair that financial firms start protecting the information they request. Those companies, after all, pay a heavy price when their customers spend hours on the phone sorting through charges made by thieves. It's time to ask financial firms if they can keep a secret. This article provided courtesy of <a href=http://creditfederal.com target=_new>www.CreditFederal.com</a>, a personal credit resource of good or bad credit credit cards and loans.

Credit Tip: Need a high limit for Christmas credit card charges? If you have bad credit, consider a personal loan by refinancing your mortgage. Even if you have cash to buy Christmas presents, we recommend using a prepaid card to make purchases because it's safer than carrying cash.