MADISON, Wis. (1/18/08)--Credit unions are unable to completely prevent leakage of personal information that can result in identity fraud because too many parts of the custody chain are beyond their control, according to a recent report commissioned by credit union industry leaders. The report, “Combating Identity Theft: Leading Practices for Credit Unions,” clarifies the nature of identity theft and classifies countermeasures in the credit union environment. Research was conducted by the University of Wisconsin E-Business Consortium (UWEBC) and sponsored by CUNA Mutual Group, the Credit Union National Association (CUNA) and the Credit Union Information Security Professionals Association. Consumers are often concerned with identity theft and the potential fraud that follows, but financial institutions currently absorb most of the effects of fraud, the report stated. In the U.S., $56.6 billion was stolen in 2006 through identity theft, with an average fraud cost per victim of $6,278. Much of these losses are covered by businesses. In 2004, businesses reported average losses of $49,254. Because of the challenges that credit unions face in battling identity theft, the credit union consortium and UWEBC commissioned the study to:
* Define clearly identity theft and the types of identity theft; * Characterize how sensitive personal information is usually compromised; * Determine how much sensitive personal information lost via each route is actually used to commit fraud; * Describe threats and defenses using “attack tree” diagrams; and * Use these results to recommend where identity theft prevention efforts should focus.
The survey builds on a series of annual research projects conducted collaboratively by CUNA Mutual, CUNA and other credit union groups, and the UWEBC. “This type of collaboration among credit union industry leaders, in conjunction with academia, is beneficial to helping credit unions compete in today’s fast-moving business environment,” said Gary Pate, director of insurance compliance and risk management for CUNA Mutual.