Sunday, August 16, 2015

Sunday Globe Special: What Was Left Behind

See: Sunday Globe Specials Are History 

They found fingerprints:

"Banks ditch security questions, favoring fingerprints for mobile; Biometrics may offer better security" by Deirdre Fernandes, Bostron Globe, August 9, 2015

A fingerprint used to mark criminals. Now it’s the key to unlocking bank accounts. Financial institutions seeking a quick but secure way to identify customers are increasingly shelving clunky security questions and passwords in favor of the simple thumbprint for banking on your phone.

Related: JP Morgan Was Hacked by Jewish Mafia 

Already under their thumb.

Providence-based Citizens Financial Group Inc. incorporated fingerprint identification in its mobile banking app for some ­iPhone users last month.

Oh, how good of them!

Fidelity Investments, headquartered in Boston, started earlier this year letting customers use their fingers to log in and pay bills and make trades.

That's $exy!

Bank of America Corp., the second-largest bank in the country by assets, is scheduled to have touch identification for iPhone and Android customers in the next few months. And others, such as Eastern Bank, the largest community bank in Massachusetts, are considering the technology.

Citizens moved to fingerprinting to meet consumer demand, but also because it is “possibly more secure than a password,” said Brad Conner, vice chairman of consumer banking for the bank.

“The customer expectation is for banks to keep up,” he said. “What customers see as capabilities in other areas they expect their financial institutions to provide.”

Before Citizens introduced the technology, the bank received questions on Twitter and other social media from customers demanding to know when they could expect touch identification.

“Finally,” one Twitter user told the bank after it announced that fingerprint access was available. “Now I don’t have to type in my stupid password anymore.”

No worries about hackers, none at all, and that tells you a lot.

For touch identification, banks are piggybacking on existing hardware and software available on newer mobile devices. The fingerprints remain on the device and aren’t given to the bank.

Since Apple introduced a fingerprint reader on its ­iPhone 5S two years ago, the thumbprint has become an increasingly popular form of identification, even beyond the phone. Your print will even let you skip the long lines to enter Yankee Stadium to watch a baseball game. The ballpark announced last week that it was joining San Francisco’s AT&T Park and Denver’s Coors Field in allowing visitors who register their fingerprints to bypass the gate lines.

Isn't a total surveillance tyranny grand?

More importantly for banks, fingerprints and biometric technology, which identifies people based on physical and behavioral traits, promises better security, said Ed O’Brien, a director at Maynard-based Mercator Advisory Group Inc., a bank consulting firm.

A retinal scan or palm print could someday be used to access an ATM machine.

Just an observation, but ever notice the bank ATMs are the only ones that come good software?

And at some banks, such as Eastern, customers who call in with a problem are recognized within seconds of speaking.

“We’re getting to the next level of security,” O’Brien said.

There’s a reason for this migration to biometric-based security. Last year, banks lost $4 billion to fraud when 1.6 million consumers had at least one of their bank or credit card accounts compromised, according to Javelin Strategy & Research, a California-based consulting firm.

How much did they make committing it?

Information that can help thieves to hack an account and answer traditional security questions, such as the name of a high school mascot or nickname in high school, can be easily culled from social media and public websites, said Al Pascual, a director for fraud and security at Javelin.

Banks are looking for customer-identification methods that are harder to replicate, such as a fingerprint or a voice, he said. Eventually, passwords may become a relic, much as dial-up Internet did. For online and mobile banking, “the password will be gone by the end of the decade,” Pascual said.

But some security experts warned that fingerprints aren’t foolproof.

A European hacking group last year claimed to have produced a duplicate thumbprint of the German defense minister using a photograph. And once your fingerprint is compromised, unlike a password, it can’t easily be changed, said Suzanne Martin, a spokeswoman for NowSecure Inc., an Illinois-based mobile security firm.

Now you tell us!

Martin suggests that consumers use both the fingerprint and a password to log into their phones and, if banks offer it, to get into their account.

“It’s a proceed-with-caution,” Martin said about fingerprint technology. “You only have one fingerprint and you can’t change it. People need to be aware to manage the risk.”


You recognize this fingerprint?

And speaking of Citizens....

"Citizens fined for profiting from depositors’ mistakes" by Deirdre Fernandes Globe Staff  August 12, 2015

No doubt a bank teller would alert you if a $20 bill accidently fell from your pocket during a branch visit. Would your bank do the same if you made a similar mistake on a deposit slip? Not if you have been banking at Citizens.

For years, the Providence-based Citizens Financial Group Inc. pocketed errors like that and shorted hundreds of thousands of individual customers out of nearly $12.3 million that was rightly theirs.

And after the Globe ran that glowing promotion piece regarding the new president just weeks ago!

On Wednesday, Citizens was fined $20.5 million for what federal regulators called illegal and shoddy banking practices, marking the first time that the Consumer Financial Protection Bureau has taken enforcement action against a financial institution for how it processes deposits.

“This practice was unfair and deceptive,” said Richard Cordray, the director of the watchdog agency. “Consumers deserve to have confidence that they can move their money around securely without exposing themselves to unwelcome risks, such as a bank resolving an error by keeping the difference for itself.”

And they wonder why the public regards them with such disdain?

In addition to the fine, Citizens will be required to refund at least $14 million to its customers, including businesses that held accounts at the bank, federal bank regulators said.

Don't worry; they will make all that back and more in about two months.

According to the consumer protection bureau, Citizens systematically failed to correct errors when customers miscalculated the total for checks and cash on their deposit slips or if the bank’s scanner misread deposit slips or checks. 

Almost as if it were a $tandard banking practice. I think the YEARS gives it away.

Instead, Citizens, the state’s second-largest bank by deposits, made corrections only if the mistake was greater than $50 between 2008 and 2012. From 2012 to November 2013, the bank corrected a discrepancy only if it was more than $25, the protection bureau said.

The bank said the problems stemmed from the use of older teller technology for next-day crediting of deposits. Citizens has since invested millions of dollars to upgrade its technology, spokesman Jim Hughes said.

Are you sick of the $hit excuses yet? They always have something.

The bank’s practices and disclosures “could have been better,” Hughes said.

Still, over the period, the amount some customers were overpaid in error was approximately equal to the amount others were shorted in their accounts, he said.

All worked out equal, bank didn't profit! HA!

“Customers who were overcredited will keep the excess funds applied to their accounts, and customers who were undercredited will be reimbursed,” Hughes said.

The bank’s stock price fell 3 percent to $26.03 a share on Wednesday. 

That's what I was looking for, yup. Damn stock price.

The widespread problems with the way Citizens handled deposit errors sparked surprise and outrage among some consumer groups.

I'm outraged but not surprised at all.

“It’s extremely troubling,” said Tom Feltner, the director of financial services at the Consumer Federation of America. “For consumers living paycheck to paycheck, $25 or $50 is a significant amount of money.”

It is unclear if other banks followed similar practices. The bureau declined to comment on whether there were other pending investigations.

A whistle-blower from inside the bank brought the problem to light, informing the bureau about Citizens’ deposit practice, regulators said.

OMG! Bless them!

The agency, along with the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency, launched investigations into the bank’s checking and savings account deposits.

What good are they if it takes a whistleblower from the inside?

After customers deposited their money at a Citizens bank branch, the slips and checks were sent to several centralized processing facilities. The bank’s systems identified instances in which the deposits didn’t match what was written on the slips and wouldn’t accept the transactions.

To get around that, the bank created substitute tickets on which the difference was either added to or subtracted from to the bank’s general ledger, according to the consent order between the bank and the consumer agency.

Looks like $ome $ort of fraud to me.

The bank also ignored its own policies for how to handle these discrepancies.

That looks like criminal complicity!

It was supposed to perform a limited review of the underlying documents in some cases, if the deposit slip and deposit didn’t match. Yet it didn’t seem to have done so and wasn’t able to detect the problems because of poor oversight, according to the order.

Regulators said Citizens also deceived consumers, since it told customers when they opened accounts that it would be verifying deposits.

The fine holds Citizens accountable for failing to perform a very basic function, said Thomas J. Curry, the comptroller of the currency.

Consumer advocates said the case illustrates the need for agencies, such as the protection bureau, which was formed in the wake of the recent financial crisis to monitor banks.

Isn't that sad? 

It's an admission that the greatest economic $y$tem ever known to man(???) is a corrupt piece of $hit.

The bureau, the brainchild of Senator Elizabeth Warren of Massachusetts, has pursued financial institutions for misleading consumers and violating laws on issues from mortgages to debt collection.


"US Senator Elizabeth Warren wants regulators to examine whether a new messaging system for banks could be used to circumvent financial regulations. Warren, a Massachusetts Democrat, wrote to the Securities and Exchange Commission, Department of Justice, and four other agencies, asking whether the system will make it harder to obtain instant messages in investigations. The system was created by Symphony Communications with funding from 14 financial firms, including Goldman Sachs. “My concerns are exacerbated by Symphony’s publicly available descriptions . . . which appear to put companies on notice — with a wink and a nod — that they can use Symphony to reduce compliance and enforcement concerns,” Warren wrote. Symphony did not immediately return a call seeking comment. The firms backing Symphony spent $66 million on the service."

It gets to the point where the only $olution is di$$olve the private banking model -- permanently.

“This shows the importance of having more cops on the beat and making sure that consumers are being treated fairly,” Feltner said.

Citizens’ fines will be spread among three regulators.

It will pay $7.5 million to the consumer protection bureau, $3 million to the FDIC, and $10 million to the Office of the Comptroller of the Currency.

The bank has also agreed to hire an auditor and establish a compliance committee to ensure that it is following the consent order. Citizens must also submit a plan within three months to, among other things, reimburse customers and provide sufficient training to its employees on processing deposits. 

Then they can live forever.


Isn't there anywhere you can get good advice these days?

Also see: Early Withdrawals 

I'm posting this far later than I had planned, but I will be back early tomorrow morning.