Answer:
If the bank permits this method for customers to initiate transfers, it's weighed the positives of customer service and less lobby traffic against the negatives of lack of customer signature and potential for ID fraud.
The data verified by this bank appears to be enough (particularly the challenge phrase if it's not easily compromised) to mitigate the risk. However, the bank should regularly revisit its risk assessment for this service.
The bank should retain a log documenting the ID verification made. In states where it is permitted, some banks will also record the conversation with the customer's consent.
First published on BankersOnline.com 2/09/04
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