Banks Move to Add Web Security

Banks aim to protect customers from identity theft and fraud
Banks aim to protect customers from identity theft and fraud

RISMEDIA, December 11, 2006?(MCT)?Two of the Pittsburgh region’s largest banks said Thursday they are among the first in the nation to add extra security steps to protect online banking customers from identity theft and fraud, after a series of incidents triggered cancellations and the issuance of new cards in the past 18 months.

Starting Sunday, PNC Bank customers will choose an on-screen image and caption to use when they access their accounts. The customers and the bank will exchange the information to check each others’ identities.

PNC, which has some 4 million credit and debit accounts, will recognize the computers its customers typically use, and ask security questions if they use a different machine, a spokesman said.

Early this year, the Downtown-based bank said a “very small” number of debit card-holders’ accounts were improperly accessed. The bank immediately canceled the compromised accounts and issued new cards to those customers. The credit- and debit-card accounts were compromised by suspicious activity that originated overseas.

Citizens Bank, meanwhile, said it will change its log-in security process for online customers in January. Customers no longer will enter their online user IDs and passwords on the same on-screen page.

Moving the password field to another page enables additional security checks so that the bank can verify customers’ identities, the bank said on its Web site.

The Federal Financial Institutions Examination Council, an umbrella group of U.S. regulators including the Federal Reserve and the Federal Deposit Insurance Corp., told banks this year to strengthen their online authentication steps by the end of 2006.

Simple user names and passwords have become too easy for criminals to bypass, the group said.

PNC’s new system is an example of “two-factor authorization,” prompting customers to prove their identities not only with a number or password they know, but with something they have? such as the on-screen image.

PNC will present about 20 images? a winter scene, or a musical instrument, for example?then ask customers to pick one and write a caption, spokesman Patrick McMahon said.

The bank will recognize that image on a customer’s home computer, for example. But if the customer travels, the bank will ask a few security questions, then show the image and ask for the caption, he said.

PNC said 52% of its customers are enrolled in online banking, compared to 44% two years ago, and 20% pay bills online.

National City of Pennsylvania said in a statement that it will “implement controls consistent with the industry guidance” in its online products beginning late this year.

Problems with compromised bank accounts are nothing new. Cardholders are considered easy targets for identity thieves. Millions of Americans were victims of credit-card fraud in recent years, according to technology analysis firm Gartner Inc. in Stamford, Conn.

In June 2005, an investigation of stolen bank records in Hackensack, N.J., involved nearly 700,000 customers of four major banks, including PNC. A dozen PNC customers in New Jersey whose account information was found during the police investigation were notified by the bank of the situation, although there had been no suspicious activity in the accounts.

In August 2005, 1,300 Dollar Bank customers in Pennsylvania and Ohio received new credit cards as a result of a debit-card leak at a credit-card processor. Action was taken by Dollar Bank after MasterCard International Inc. informed the financial institution that cardholders’ information may have been compromised.

When Dollar Bank found what it considered an odd transaction, it suspended all 1,300 debit card accounts and issued new cards.

Distributed by McClatchy-Tribune Business News.

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