US regulators are proposing the introduction of new rules that will require all banks to develop an identity theft prevention programme for customers that includes "red flags" to signal a possible risk of ID theft.
The new regulations would require each financial institution and creditor to develop and implement an ID theft prevention programme that includes policies and procedures for detecting, preventing and mitigating ID theft in connection with account openings and existing accounts.
The proposed regulations include guidelines listing patterns, practices and specific forms of activity that should raise a "red flag" signalling a possible risk of identity theft.
The new rules also would require credit and debit card issuers to develop procedures to assess the validity of a request for a change of address followed closely by a request for an additional or replacement card.
The Federal Deposit Insurance Corporation, the Federal Reserve, the Office of the Comptroller of the Currency, the Office of Thrift Supervision and the Federal Trade Commission are accepting public comments on its proposed rules through to mid-September.
An estimated 3.6 million US households - around three per cent - fell victim to at least one type of identity theft during a six-month period in 2004, according to a report by the US Justice Department's Bureau of Justice Statistics.
Earlier this year a US House committee has approved a new data security law that requires companies that store confidential personal information to notify customers of any security breach.