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IDENTITY THEFT ISSUES AND OPPORTUNITIES
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IDENTITY THEFT ISSUES AND OPPORTUNITIES

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  • 1. IDENTITY THEFT ISSUES AND OPPORTUNITIES American Bankers Insurance Association Annual Conference October 9, 2003 Presented By: Sherita Cox, Union Bank of California Insurance Services Mike Owens, Coverdell & Company, Inc. Walter Grote, Travelers
  • 2. WHAT IS IDENTITY THEFT?
    • Someone pretends they are you in order to commit criminal acts:
    • Credit card fraud
    • Unauthorized phone / utility services
    • Unauthorized medical services
    • Bank fraud
    • Loan fraud
    • Obtain employment
    • Fraudulent documents (Drivers license, tax returns, government benefits)
  • 3. WHAT IS IDENTITY THEFT?
    • Identity Theft/Fraud is the fastest growing crime in America
    • A recent FTC survey shows that last year alone 9.9 million people were victims of identity theft
    • An estimated 27 million victims in the past 5 years
    • Previous FTC estimates were at 750,000 victims per year and 30-40% annual growth rates
    • Significant under reporting in the past
    • A 6 fold increase in ID Theft complaint calls over 6 years
    • 42% of complaints are credit card fraud; 22% are phone or utility fraud; and 17% are bank fraud
  • 4. WHAT IS IDENTITY THEFT?
    • Identity Theft/Fraud is a costly crime
    • Victims, on average, spend 175 hours and $1,000 out of pocket expenses to clear their names
    • It takes victims an average of 2 years to remove an average of $18,000 in fraudulent charges from credit reports
    • The FTC estimates the total costs of identity theft and fraud in the BILLIONS OF DOLLARS
  • 5. WHAT IS IDENTITY THEFT?
    • Clearing your name is time consuming and frustrating
    • Until you can prove otherwise, you are responsible for acts committed by a person who has stolen your identity
    • It can take over a year before a victim finds out their identity has been stolen
    • Creditors are not easily convinced that debts are not yours
    • Victims can lose their ability to obtain credit and financial services
    • Victims can lose their wages through garnishment by a collection agency or worse, lose their job
    • Victims can lose their driver’s licenses
    • Clearing your name can take several years
  • 6. WHAT TO DO IF YOU ARE A VICTIM
    • Act promptly
    • Document all contact you make with others regarding your situation
    • Call the fraud units of all the credit bureaus to report the crime and add a victim’s statement to your report
    • Contact all creditors ASAP by phone and in writing
    • Get replacement cards with new account numbers and carefully monitor your mail and bills for evidence of new fraudulent activity
    • Report the crime to the police with jurisdiction in your case
    • Notify the local Postal Inspector
  • 7. WHAT TO DO IF YOU ARE A VICTIM
    • File a complaint with the Federal Trade Commission
    • Contact the Social Security Administration to report fraudulent use of your Social Security number
    • Contact your phone company if your calling card has been stolen or you discover fraudulent charges on your bill
    • You may need to change your driver’s license number if someone is using yours as ID on bad checks
    • Don’t give up until your credit is restored
  • 8. HOW TO PROTECT YOURSELF
    • Never give personal information over the phone, through the mail or over the Internet unless you initiate the contact or know who you are dealing with
    • Shred all financial receipts before throwing away
    • Shred those unused credit card offers before throwing away
    • Protect your PINs and passwords for your account
    • Carry only what you absolutely need
    • Pay attention to your statements and billing cycles
    • Protect your mail
    • Check your credit report from all 3 reporting agencies regularly
    • Install a firewall on your personal computer
  • 9. IDENTITY THEFT SOLUTIONS
    • Prevention and Detection:
    • Identity Theft prevention guide
    • Credit reports – to determine if someone has established credit in your name
    • Credit monitoring – be alerted to new creditors or changes to your credit report
    • DMV reports – to determine if any violations or accidents from someone using your identity
    • Social Security Search – to assure no one is working under your identity
  • 10. IDENTITY THEFT SOLUTIONS
    • Fixing the Problem:
    • Credit card registration – automatic notification of all card companies
    • Emergency Cash access
    • Counseling from ID Theft experts. Step by step instructions on what to do.
    • Restoration service to clear up fraudulent information. Assistance or complete service on behalf of the customer
  • 11. IDENTITY THEFT SOLUTIONS
    • Insurance Coverage:
    • Lost wages as a result of time taken off from work to deal with fraud
    • Attorney fees – Defending suits, removing civil or criminal judgments, and challenging information in a credit report
    • Notary and certified mailing costs
    • Fees for reapplying for loans that were declined due to ID theft
    • Phone charges for calling merchants, creditors, banks and law enforcement
    • Spouse protection – Joint accounts and separate incidents affecting spouse
  • 12. MARKETING STRATEGIES
    • ID Theft solutions are a natural product for a bank to provide their customers :
    • The trusted banker relationship is the most logical source of ID Theft solutions for customers.
    • Protecting the customer also helps protect the bank from fraudulent charges, reducing risk and cost
    • The ID Theft programs have greater appeal to the middle to upper income customer segments vs. the lower to middle income customers target market for most direct marketing programs
  • 13. MARKETING STRATEGIES
    • Offers and Positioning:
    • Straight offer of a complete program with credit reports, credit monitoring, counseling and restoration, etc. with an amount of ID Theft Insurance included ($10,000 -$20,000).
    • Blanket ID Theft Insurance ($500 or $1,000 coverage) for all or selected customer segments (senior, platinum, etc.) provided by the bank. This adds significant value to the bank customer relationship at a very low cost.
  • 14. MARKETING STRATEGIES
    • Offers and Positioning:
    • 3. Blanket ID Theft Insurance w/ Voluntary upsell for either additional coverage or a full program. This can offset the cost of the blanket coverage and generate revenue.
    • 4. Customer Appreciation program ($500 or $1,000 gift ID Theft coverage) with the option to purchase additional coverage or a full program. Activation is required for the gift coverage (similar to Gift AD approach).
  • 15. MARKETING STRATEGIES
    • Distribution Channels
    • Direct Mail
    • Outbound Telemarketing Channels
    • Customer Call Centers / IVR
    • Statement Marketing
    • Credit Card or Debit Card Activation VRU applications
    • Offer in conjunction with Privacy Notice. Turns a compliance communication piece into a customer relations and marketing device.
  • 16. IDENTITY THEFT ISSUES AND OPPORTUNITIES
    • Discussion & Questions
    • ???????