Need Finextra Community Assistance

Hi Roberto,

In France, to be granted a loan by a bank, you need to open an account first.

In order to do so, you need to provide them with:

• printed copy of your ID card
• proof that you still live where you claim to live (last Electricity bill usually)

Then they can check your credit history and decide to grant you with a loan or not.

Most of the time, they just check that your debt is not over 30% of your income.

Hope it helps,

Cedric

Hi Robert,

In the UK we've pretty much adopted the FATF recommendations - that means you have to present yourself in person with a Government-issued Photo ID such as Passport or Drivers License, plus a proof of Address less than 3 months old, such as a Bank Statement or Utility Bill.

National Insurance Number (SSN) doesn't really figure unless you're applying for a Tax-exempt product such as an ISA (Individual Savings Account) which only allows you to open 1 per annum.

I know in Germany you can go to your local Post Office and have them validate your identity credentials as above and then the Post Office sends your authenticated application form off to the Credit Card Company.

Cedric would an identity theif simply provide a fraudulant ID card and utility bill posing as the victim? What are their methods to circumvent the system? Are they? Is it a problem? We dont hear much about ID Theft in France.

Keith,

"The FATF Forty Recommendations and Special Recommendations on Terrorist Financing" Correct?

Same process as France? Is this all of Europe? What are the obstacles for the thief? How do they game the system? How prevelant is the issue of new card fraud, new loans etc?

"I know in Germany you can go to your local Post Office and have them validate your identity credentials as above and then the Post Office sends your authenticated application form off to the Credit Card Company."

This seems like a relatively easy hurdle to overcome? Is it?

If I'm an identity thief how am I commiting new account fraud in Europe?

In Australia ...

Identification of customers opening bank accounts has been regulated since the 1980s.  We have a roster of "evidence of identity" documents (passports, Australian driver licences, government issued cards of various sorts, other bank accounts, utility bills, birth certificates, naturalisation certificates ...) each of which is equated to a set number of "points" reflecting broadly the quality of the document as proof of id.  You need to present 100 points total to open an account.  Usually passport + driver licence suffices.

The last few years have seen policy efforts to improve the robustness of the system in the face of high quality forgeries.  An government operated online "Document Verification System" is in an advanced stage of development, and will provide confirmation of the validity of document numbers cited by banks and other institutions wanting to check given ids.  Basically a black list. 

There's a new crop of Electronic Verification (EV) services that purport to check id documents on behalf of banks etc.  The services are somewhat controversial, and they seem to be operating in a grey area of the 1980s law, where in-person presentation of the documents was expected but actually not mandated in all scenarios.  Hence we have customers opening purely online savings accounts on the basis of document numbers being quoted over the Internet, but without anyone at the bank sighting the original ids. 

However, to obtain credit of any sort in Australia does require the customer to present "100 points" worth of original id documents at a branch.

Good luck with your survey.

Stephen,

GREAT stuff. Like I stated to the others:

This seems like a relatively easy hurdle to overcome? Is it?

If I'm an identity thief how am I commiting new account fraud in Aussie? My sister inlaw is married to an Oz in Brisbane. We froze her credit here to prevent new account fraud in the US. Do you have anything similiar? Identity theft protection? Is it needed?

I don't have figures on the incidence of fraudulent accounts opened using fake or stolen id documents.  This does occur; the fact that counterfeit passports etc. are available to criminals is what drives the development of the "Document Verification System".

It is also noteworthy that at least one Australian state is moving to smartcard driver licence technology, to resist counterfeiting. Theoretically, this move plus the chip-based e-passport we now have, would almost eliminate counterfeiting ... except that the ability to electronically verify the bona fides of these documents (with chip readers) is not on the horizon in Australia. So a high grade counterfeit or copy will still fool many humans depending on it.

[In contrast, I believe that in the UK, it is proposed that under the national ID smartcard, banks will indeed have the ability to read the chip to verify its authenticity.]

Having said all that, the great majority of retail banking fraud in Australia happens by taking over existing accounts (skimming, carding, CNP fraud, stealing new cards from post boxes etc.) and not by opening fake ones.

In terms of id theft prevention in Australia ... we have criminalised id theft and other cyber offences, and generated reams and reams of consumer id safety advice.  But there is no mechanism as far as I know for consumers to freeze their own credit.  We have a small number of licenced credit reporting agencies that compile credit histories.  These will provide histories to consumers (for free, or for a fee for fast service) and they provide alert services that let you know when someone has accessed your file (as might happen when a thief uses your identity behind your back).

My considered opinion is that most primary identity documents in Australia are robust and they are improving all the time, such that the ability for criminals to open fake accounts using copied or counterfeited primary ids is kept reasonably in check.  The bigger problem in my view, which is not well managed, is id takeover, especially the theft and replay of digital identities (payment card numbers, account numbers, passwords, corporate IDs etc). Crucially, no amount of consumer education ("only shop at websites with SSL padlocks") can protect them against CNP fraud when their account details are stolen not from dodgy websites but from merchant and processor databases.

To summarise, I reckon we do a reasonably good job of identifying people face-to-face and originating new digital identities, but we do a terrible of job protecting them once they're issued.  Digital identities are pure gold but we don't do enough to properly safeguard them.

Thank you Stephen, this is very helpful. In the US a thief doesnt need any documentation to present to a bank to compromise an identity for new account fraud. All they need is information, like name, address and the Social Security number. Whic is why its such a mess. From there they lie on applications.

To anyone: In Europe is the fundamental issue fake documentation? When an identity thief presents forged/fake real looking id cards they can then be that person? Is credit monitoring from a credit bureau an option for consumers? Is there a cost for this? Who are the credit bureaus?

In Finland the main issue would be fake/forged documentation, since a picture ID is required for all over-the-counter business in the bank branches. The modern IDs are pretty tough to forge and forgeries easy to spot by professionals like bank tellers. If there is a suspected fake document the police are summoned and their database includes pictures and such of the real person.

When opening a bank account, the social security number on the ID is first mathematically verified (it has a simple algorythm built in), and then submitted electronically to a national registry, which then returns the name, address and credit info tied to that SSN. Utility bills or such are therefore not needed.

I guess the low identity theft figures in Finland are mostly due to the SSN, where the system does real-time checks on the status of the identity, combined to a difficult-to-forge array of ID papers (passport, driver's license, national id). Also, nearly 100% of Finns always carry a picture ID, since the law requires "every person of age 15 and up to be able to reliably prove their identity to the authorities". Thus there is a "chain of picture identity papers" starting from childhood in the national registry, and any new ID application is verified against previous ones and the photos in the database, making applying for an ID with a stolen identity extremely difficult. You can only apply for an ID to replace one that is broken or expiring. Stolen or lost IDs are always submitted for criminal investigation before a replacing ID is issued.

Excellent Kalle. Thank you.

Hi Roberto,

I don't know much about ID Theft in France. I guess that, like in many countries, they prefer to be silent about it. I have absolutely no idea if it's a big thing or not in France.

I presume that if you show up with a fake ID and a fake utility bill, then you might get the money.

All I know is that we try to protect ourselves with lots of documents, thinking that it's harder to counterfeit, but the truth is that we've seen many reports on TV about people being stolen their identity and having a hard time proving they are who they pretend to be, and that they did not do what the fraudster did pretending to be them.

Official documents may put the hurdle higher, but it decreases the flexibility of the clearing process once you're ID is stolen.