Increasing Incidence of Identity Theft

f Sangko Sentral n ina.

MAYNILA, PILIPINAS

SUPERVISION AND EXAMINATION SECTOR OFFICE OF THE DEPUTY GOVERNOR

CIRCULAR LETTER NO. CL - 2007- 048

To All Banks and BSP-Supervised Non-Bank Financial Institutions

Subject :INCREASING INCIDENCE OF IDENTITY THEFT

September 2006, all banks are hereby enjoined to adjust or update, as external threats to information as shown by the increasing incidence of identity theft. appropriate, their information security program in light of changes in internal and Pursuant to the provisions of Items 2.a and 2.b, Circular 542 dated 01

this crime may later translate to reputational and financial costs to the financial been stolen but also to the financial institution that might inadvertently facilitate these fraudulent transactions. The reputational and financial risks associated with institutions if left unattended. Identity theft causes harm not only to the individual whose identity has

card fraud, account takeover fraud, new account fraud and check fraud' to name a few. There are several schemes perpetrated by these identity thieves: credit

breaches in security of customer information must be acted upon immediately by bank management. The prevention of identity theft and more importantly deterrence of

their policy in establishing the identity of their customer and monitor account Banks and non-bank financial institutions are likewise enjoined to review

Account takeover fraud occurs when a fraudster obtains an individual's personal information, and changes the official mailing address with that individual's financial institution (FI). Once accomplished, the fraudster has established a window of opportunity in which transactions are conducted without the victim's New account fraud involves the criminal using a false identity, made-up or stolen, to open a new account, Check fraud may either be done through: (i) altcrations to the check, (ii) forgeries of the maker's signature on either the facc of the check or the payee's endorsement on the back of the check, or (ii) counterfeit checks created by a dishonest th ird party 1 Credit card fraud is where a fraudster causes the credit card of another person to be charged for a typically to obtain a credit card or loan knowledge ourcha

PAnAnALAPING MAtatAG, BANSAnG PANAtaG

Mabini St., Malate 1004 Manila, Philippines Trunkline (632) 524-70-11 URL:www.bsp.gov.ph e-mail: [email protected]

activity to determine those transactions that do not conform with the normal or

Customer" (KYC) policy should be a core feature of banks' risk management and expected transactions for that customer or type of account. "Know Your control procedures, and be complemented by regular compliance reviews and internal audit. The importance of the strict implementation of the KYC policy has never been more pronounced and cannot be over-emphasized with the emergence of identity theft and similar fraud

For information and guidance

NESTOR A. Deputy'Governor ESPENILLAOR

September 2007