FACTA - ID Theft Procedures

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Question:

I am a new compliance officer and in the process of developing a procedure pertaining to ID theft. How do some institutions handle holds on accounts for customers that are a victim of identity theft (FACT ACT)? I know that we could close the deposit account that is affected by the ID theft and reopen a new one, but what about the other deposit accounts the customer has with our institution?

Answer:

This is why written procedures should be developed and periodically amended to cover various scenarios. Obviously, it would be impossible to anticipate every method. I would suggest that you review the potential risk of loss to your financial institution should you leave the other accounts open based on the facts of the current situation. Was the victim's checkbook stolen? If so, then possibly only that account would be affected and you could leave the others open. However, if the victim's SSN was compromised then there is a possibility of exposure to all accounts.

First published on BankersOnline.com 3/12/07