CU, bank employees aid fin. fraud fight, FinCEN finds

WASHINGTON (10/19/10)--"While suspected cases of identity theft are on the rise, vigilant financial institution employees are reportedly rejecting over half of fraudulent vehicle or student loans facilitated by identity theft prior to funding," a Financial Crimes Enforcement Network (FinCEN) survey has found.

"FinCEN's study of identity theft Suspicious Activity Reports (SARs) reveals how important suspicious activity reports can be to deterring illicit activity," FinCEN Director James Freis Jr., said. "The vigilance of employees of financial institutions is apparently deterring greater losses when the employees suspect loans are tied to false identities," Freis added.

The FinCEN study found that identity theft "was the sixth most frequently reported characterization of suspicious activity," behind structuring/money laundering, check fraud, mortgage loan fraud, credit card fraud, and counterfeit check fraud.

The number of identity theft-related SARs filed increased by 123% over the number reported in 2004. The total number of SAR filings increased by 89% during that same time period.

FinCEN found that credit card fraud "was the most frequently co-reported suspicious activity characterization with identity theft, appearing in over 45.5% of sample filings," and that just over one-quarter of total reported identity thefts were committed by a perpetrator that knew the victim.

SAR report filers "credited routine financial institution account monitoring" with revealing identity theft in over 20% of the filings covered by the survey, FinCEN said. While 28% of identity theft victims uncovered the thefts during a review of their own accounts, "credit reports, law enforcement investigations, collection agencies, and credit monitoring services were responsible for revealing identity theft in a decreasing percentage of sample filings," FinCEN added.