Banks could do more to protect customer data

As more fraudsters take over customer bank accounts, a company that shreds confidential information says banks need to do more in terms of safeguarding confidential material and educating customers about the risks of fraud.

According to CIFAS, the UK’s fraud prevention service, in 2008 there was a 207% rise in facility takeover fraud, whereby "scammers" intercept bank statements, credit card bills, receipts and account slips so that they can take over bank accounts that belong to other people.

Interestingly, while banks appear to have done considerable work in terms of implementing internal systems to detect fraud, sending credit card or account statements and PIN numbers by post to customers is hardly state-of-the-art fraud prevention.

Shred Easy, which collects, destroys and recycles materials including paper and IT equipment, believes more could be done to educate bank customers about fraud and that banks should provide free advice on fraud and identity theft.

There is something to be said for greater customer awareness of what indicators to look out for in order to help prevent and detect fraud earlier. When you open an account with a bank it would be good to receive a pamphlet/brochure on bank account and credit card fraud and tips as to what telltale signs or behaviours customers should look for.

But also banks need to rethink their approach to safeguarding customer data. If they are still sending out paper account statements that can easily be intercepted (instead of say a digitally signed encrypted electronic file) then customer education will only go so far in helping reduce fraud.