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Facial recognition tools fight fraud present privacy issues
MECHANICSBURG, Pa. (12/5/11)--Facial recognition technology is gaining wider acceptance in the financial services industry. Members 1st CU, Mechanicsburg, Pa., is among the financial institutions using the technology to combat fraud.

Members 1st CU recently employed facial recognition to identify someone who entered a branch and used a fictitious driver's license, Chip McBreen, Members 1st's head of fraud and prevention security, told Reuters (Nov. 21).

Facial recognition technology has made strides across industries. It helps casinos identify cheaters and retailers to capture demographic information from shoppers. It's also used on Facebook to identify potential abuse.

In addition to asking members and customers for their facial images, financial institutions capture images from ATMs and teller windows to create searchable databases of recognition information. When a string of suspicious activities is reported, a financial institution can connect images to potentially fraudulent transactions.

However, there are privacy concerns about how facial recognition can be misused. Consumers who wish to minimize the data they offer publicly may be reluctant to provide facial images to their financial institutions that are connected to their name. Having a member/customer's picture is not essential to performing transactions at a financial institution, said Paul Stephens, director of policy and advocacy for the Policy Rights Clearinghouse.

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