Account Holders Dilema

There were at least 2 articles in the news this week that demonstrate a coming trend of Banks holding their customers accountable when identity thieves strike. These 2 stories should serve as a big 'wake up' call for cosumers. Consumers do not know what they do not know !!!

Story #1:

Target 5 Warns Of 'Online Insecurity'
Special Report Looks At Pitfalls In Online Banking
POSTED: 10:33 am CDT May 24, 2007

CHICAGO -- An Indiana woman says she has 26,500 reasons you should pay attention to what happened to her online bank account -- and don't let it happen to yours. Somebody in Hawaii knows something about the money that started in the bank account of an Indiana woman, Target 5's Lisa Parker reported Wednesday night.

"Nobody called me. Nobody ever questioned the transaction. And I only found out about it when I got my bank statement," Marci Shames-Yeakal told Target 5. The transaction she referred to was $26,500 transferred from Shames-Yeakal's line of credit into her business account, then wired to Hawaii. "They found out that the wire was sent to a bank in Hawaii, to an account in Hawaii, and then the next day, people went into that account and took the money and wired it out to Austria and it was gone," she said.

Gone for good.

Shames-Yeakal said she got that news in a letter from her bank, Citizens Financial Bank of Indiana and the south suburbs.

Her Munster, Ind., branch told her that she had signed an agreement stating that the bank "will have no liability to you for any unauthorized payment of wire transfer using your password."

The same letter stated that the bank's "security procedures were commercially reasonable."

"The irony of all that is that they didn't do anything to protect us," Shames-Yeakal said. "They gave us a user ID and a password, and that's what they call their protection."

Parker said that the Indiana woman's story joins a growing number in which banks appear to be taking a hard line, putting the onus on consumers to prove that they didn't cause a security breach that led to online theft. "It's really unfair to say, 'OK, now you have to prove a negative. You have to prove what didn't happen," said consumer attorney Clint Krislov.

Consumer advocates point to the increasing number of threats to online banking security, such as "phishing," those persistent and realistic e-mails from scammers posing as your bank; hackers; viruses that intercept passwords; and key loggers, the malicious software that silently takes a snapshot of all the strokes you type, including user IDs and passwords. "We consumers, we don't know what protections we need until we've been fleeced," Krislov said. "And so you have to be as aggressive and as assertive as you can in finding out what your bank does to protect you." Parker said that many consumers think that their money online is protected, much like their credit cards, which limit liability if they are stolen. But in the world of online banking, she said, the protections are very specific and somewhat narrow.

Regulation E, passed in Congress in part to encourage online banking, sets a consumer's liability:
· $50 if a theft is reported within two days
· $500 if reported within 60 days
· 60+ days and there is no guaranteed protection

Although Shames-Yeakal said she found her problem within 10 days, to her dismay Regulation E did not protect her because her account was a business one, not a personal one.

"Since all this has happened, I've learned that the bank could do a lot more and be a lot more aggressive in protecting assets," she said.

And many banks are more aggressive, Parker said. Some have recently announced anti-fraud innovations, like biometric IDs, which scan your eyes or fingerprints; security fobs that rotate multidigit codes and online programs that require visual IDs to thwart Trojan viruses that hijack accounts. "In this brave new banking world," Parker said, "it's the kind of protection aimed at keeping your money where you put it." "Once it's outside the banking system and outside the country, it's gone," Krislov said. "We can search for your money, we can search for bin Laden. Chances are, we'll catch him first."

Citing privacy concerns, Citizens Financial would not comment for this report, even though Shames-Yeakal agreed to sign a waiver allowing the bank to talk about her case, Parker said.

There are two lessons taken from Shames-Yeakal's experience: Know what your bank has in place to thwart fraud and know you must regularly watch all of the activity in your online account. The quicker you catch discrepancies in personal accounts, the better chance you have of recovering your money.

Story #2:

Bank of America Sues ID Theft Victim
New York Post Reports that Bank of America Wants Their Money - from the Victim
By Aly Adair

Chuck Bennett of the New York Post reported Monday, that Gloria Carlo, 51, of The Bronx, was slapped with a lawsuit by Bank of America for $23,312.04. Bennett reports that Carlo was a victim of identity theft and the thieves emptied her life savings from her five Bank of America accounts between August and October of 2005.

The thieves allegedly used her accounts to make purchases on Jewelry Television, Shop NBC, QVC, and Home Shopping Network. On one September day alone, her bank statement showed 37 transactions to Jewelry Television that lowered a single account balance from $9,286 to $5,074. The day before, nine transactions to Shop NBC made a balance in another account go from $913 to a negative $3,993, according to the New York Post article. Carlo ended up with a total overdraft of $20,000 before it all ended.

Carlo thought she did everything right: she called police, filed a report, filed an affidavit of fraud, and repeatedly protested to the bank, who according to Carlo, did not reply. Her efforts to clear up the situation were delayed when her mother and brother died, and she ended up in the hospital for heart failure and pulmonary embolism. When Carlo got home from her three-day stay at the hospital, she found a court summons under her door informing her that Bank of America was filing suit against her.

The bank claims that the $23,312.04 was money that Carlo used on the two-month shopping spree after she already depleted her entire savings account worth $38,000. Bank of America declined to comment to the New York Post, but Carlo said, "It was enough to open a jewelry shop. Why would I do this? The bank is a bigger villain than the thief."

In the report, Carlo tells reporter Chuck Bennett that a separate $30,000 seven-year CD also disappeared. According to Carlo, she never received a phone call or alert from the bank that her accounts were being used excessively for television shopping, and inquiring as to whether the charges were being made by her. Carlo wants to know why the bank did not see the huge overdrafts and do something about them. She said int he report, "What kind of bank would give an overdraft of $23,000? We are not talking about $100."

Carlo is a retired clerk with New York's Human Resources Administration and lives on her $2,110 per month pension and Social Security disability benefits. She has hired a lawyer, and according to the lawyer, she has lost a total of $68,733.77 in the alleged identity-theft scam.

More resources
http://www.nypost.com/seven/05212007/news/regionalnews/dough_unto_others_regionalnews_chuck_bennett.htm
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