Brandishing Technology to Thwart Identity Thieves

Identity Theft

If 2005 was the year that identity theft became a household word, 2006 will be the year that banking institutions, the principal targets of most frauds, put in the necessary safeguards to ensure they can't happen.

The ease with which identity thefts were perpetrated, from stealing credit card or shoulder surfing at ATMs, on up to more elaborate schemes such as phishing and hacking into databases, has pushed the industry into overdrive in coming up with ways to combat the scourge, which sucks billions out of the economy and harms the personal lives of those affected.

The Federal Financial Institutions Examination Council, in guidance issued late last year, places most of the blame on the reliance on "single-factor" authentication, by which customers are asked to provide something they know, such as a user ID and password. The FFIEC recommends the adoption of two-factor authentication, in which customers are asked to provide both something they know and something they have, such as a USB token device or a smart card.

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