Magazine article American Banker

States Turning Up HeatOn Bank-Data Dealers

Magazine article American Banker

States Turning Up HeatOn Bank-Data Dealers

Article excerpt

By JARET SEIBERG Seizing the initiative from the federal government, state attorneys general are cracking down on information brokers. The latest example is in Connecticut, where Attorney General Richard Blumenthal has sued NRS Information Services Inc., a now defunct company that allegedly sold confidential consumer information, including bank account numbers and balances.

"As law enforcement officials and consumer protection activists, we have a natural role to play combating identity theft," Mr. Blumenthal said.

The suit, filed last month, charges that employees at NRS conned banks into releasing customer data by impersonating the consumers. As part of the fraud, the company allegedly obtained copies of consumer credit reports. These reports contained enough personal data for the company to deceive the bank, according to the suit.

Similar investigations are reportedly under way in Massachusetts and New York. The crackdown comes as consumer groups have grown increasingly worried about the ease with which criminals are able to steal confidential bank data.

Federal regulators this summer warned banks to guard against information brokers. In August, for instance, the Office of the Comptroller of the Currency urged banks to draft policies on what information may be disclosed by phone.

But Congress failed to enact a bill that would make it a federal crime to trick banks into revealing confidential customer data and none of the regulators have issued rules requiring banks to impose more safeguards.

Mary Griffin, a lawyer at Consumers Union in Washington, said the federal government has not done enough to protect the public. …

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