Pub. 3 2013-2014 Issue 5

O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S - H E L P I N G C O L O R A D A N S R E A L I Z E D R E A M S March • April 2014 9 In 2013, banks prevented $13 billion in attempted fraud. But the threat of fraud is ever-growing. The Identity Theft Resource Center reported more than 600 breaches in 2013 – a 30% increase over the previous year. The sectors reporting the most breaches: health care and business. It’s important to note that the security of the payments system – made up of banks, card networks, retailers and processors – is a shared responsibility. Each of those groups must invest the necessary resources to combat increasingly sophisticated threats to the system, Childears said. Banks take a number of steps to protect their customers, including: • Strict monitoring accounts for indications of suspicious activity. • Blocking and reissuing cards for affected accountholders. Customers, too, can take steps to protect themselves against fraud, by taking the following steps: • Check your account often for suspicious activity – either through the Internet, phone or ATM statements • Enroll inmobile fraud alerting programs that your bank may offer to warn of suspicious activity on your accounts • If you have a reason to suspect fraud, contact your bank right away by phone, your online banking site, or at the branch • Never let your credit or debit card out of your sight • Put your cards in a protective sleeve or wallet • Protect your PIN! Don’t carry it in your wallet, and change it periodically • Choose to do business only with companies you know are reputable, particularly online • When shopping online, make sure your browser’s pad- lock or key icon is active, indicating a secure transaction • Tear up or shred receipts before throwing them away FinancialInfo.org is home to a wealth of information consum- ers can use to guard against fraud and financial crimes. There, consumers can find tips on how to prevent credit card, computer and identity theft to warning signs of predatory lending, as well as tips for making a home purchase and choosing the right bank. FinancialInfo.org is CBA’s one-stop-shop for consumers to keep themselves financially savvy. Other topics include: • Protecting oneself at the ATM • Knowledge on scams • Payday Loans • Vehicle financing • Credit do’s and don’ts • The danger of credit card debt Banks can protect themselves against fraud with: • Document retention policies in place that take into ac- count current and evolving electronic data formats and mapped data sources • Litigation preparedness programs and evidence collec- tion methods • Litigation discovery committees with representatives from: IT, records management, compliance and legal • Should a breach occur, document all costs, both direct and indirect, for a potential damages claim • Notify your insurance carrier or broker of possible losses being sustained • See below for suggestions on documenting the bank’s expenses for possible recovery later Bank’s expense documentation Banks should document all costs that they are incurring be- cause of the data breach. A bank should keep track of its direct costs, such as the cost of card reissue and losses on debit cards when the bank has to cover such amounts. Banks also should keep track of “indirect” costs they are incurring, such as the costs of keeping the bank and branches open additional hours, overtime and other compensation paid to employees to work at those locations, to additional security guards, as well as overtime and compensation paid to other bank personnel handling and responding to telephone and email inquiries and/or processing matters related to the data breach. Banks also should document any other out of pocket costs, such as legal fees incurred by them because of the data breach, postage and costs of customer communications and any other outreach/customer relations measures. In general, banks should try to keep as detailed re- cords as possible of any costs being incurred in order to support a potential damages claim. If there is any possibility that insurance covers any such losses, contact your insurance carrier or broker and notify them of the possible losses being sustained. n “Our first priority is to protect our customers and to make them whole,” Childears said.