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St. Paul, Minn. — Conventional identification no longer guarantees identity.
John McCullough, executive director of the Retailers Protection Association, says computers have made it easy to forge drivers licenses and similar documents.
"There's more risk in the market than ever before in terms of this technology being used," McCullough said.
Until recently, many of the fraud problems banks faced revolved around forged or stolen checks. Joe Witt, an attorney with the Minnesota Bankers Association, says the main area of concern is now identity theft.
"What we saw in the past was a situation where if they got hold of a checkbook, they would write out all of the checks in that particular book and that was it," Witt said. "Now what they're looking to do, once they access your information, is not only write out all of those checks but actually open up new accounts -- both on the deposit side, like a new checking account, and also applying for loans. That's where we really see identity theft as a much higher level type of fraud, and also a lot more damages involved."
Bankers are rolling out the first statewide effort to thumbprint new account applicants in hopes of ensuring their identity. Thumbprinting is nothing new to Minnesota's banking industry. Five years ago, many banks around the state began requiring thumbprints from non-customers wishing to cash checks.
Some industry estimates suggest that practice has reduced check cashing fraud by as much as 50 percent.
Fraud expert John McCullough who works with Minnesota's Financial Crimes Task Force, says in addition to discouraging criminals from fraudulently opening accounts, having good thumbprints will make finding and prosecuting crooks much easier.
"One of the main issues that we have is, can you identify the party that committed the crime? And this is one valuable tool that, if the account is opened fraudulently, we have a thumbprint. In most cases, these offenders have previous criminal records and we're able to match up who they are," McCullough said.
The bankers association represents 95 percent of Minnesota's banks. The group predicts a little less than two-thirds of its members will require thumbprints for new accounts.
Pat Hart, the association's president and the chairman of Paragon Bank, says he thinks customers won't mind submitting to thumbprinting. Paragon is a relatively small bank with branches in Shakopee and Wells, Minnesota.
"We're just doing our part to help make it earlier to convict the bad guys," Hart said.
Other bankers aren't sure whether they'll take thumbprints on new account openings.
At Western Bank, its six metro area branches don't even require thumbprints for non-customer check cashing. Senior vice president Vicki Grant says there's a concern thumb printing could offend people.
"Is this going to be uncomfortable? Are they going to feel like, 'They want my thumbprint. This is weird. What do they want that for?'" said Grant. "Because the vast, vast majority of people who come into this bank are honest and normal, and have no intention of committing any kind fraud. So it's just something that we're weighing. How do we do this that makes the best sense."
For now, banks have the option of whether to require thumbprints. But thumbprints could become mandatory under the USA Patriot Act.
Some bankers say they think it's only a matter of time before the federal government will require account holders to submit to more sophisticated biometric scrutiny, such as computer-screened facial or retina recognition.
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