Fool Me Once ...

It's becoming increasingly difficult for the "average" banking customer (if there is such a person) to separate reality from fantasy these days. At least that's been my own recent experience, as a near and actual victim of fraud. First there was the very official-looking (and reading) e-mail I received about a security check of my Citibank credit card. "Your response is mandatory," declared the message, complete with the familiar umbrella logo.

I was smart enough to ask senior editor Ivan Schneider to look at the e-mail. It took him about a second to pronounce it fraudulent, and he was able to show me the coding that proved the message did not come from Citi.

I wasn't so lucky with another card (one that I never use; it sits in a file in a desk drawer). It seemed strange a few weeks ago when, for several days in a row, I received a series of recorded, official-sounding calls regarding potential misuse of the card. No way was I going to respond to a computerized message that I couldn't prove was legitimate! I did call the bank to inquire about the calls, and the call center rep helpfully cancelled the account and arranged for a new card - although she could not provide any information or verification about the mysterious automated phone calls.

But was my face red when I subsequently received a credit card bill with a four-figure charge from a pet supplies operation in Long Island. When I called to dispute the charge and pointed out that my files probably showed a record of my earlier inquiries, the rep replied, "I don't see that. The records do show that we tried to call you several weeks ago about unusual activity on your card, but no one was home."

I was lucky with these two close calls, but the experiences left me wondering: In an era where paper statements and checks are on the way out, how do bank customers determine which communications are for real, when there's as much risk in not responding to a legitimate message as in falling for a fraudulent phishing attempt? And what can banks do to address the confusion and paranoia, which could hamper their efforts to build the online channel? Citbank's clever ad campaign about its efforts to fight card fraud is just a first small step in what is going to be a long and painful public education process.

Katherine Burger is Editorial Director of Bank Systems & Technology and Insurance & Technology, members of UBM TechWeb's InformationWeek Financial Services. She assumed leadership of Bank Systems & Technology in 2003 and of Insurance & Technology in 1991. In addition to ... View Full Bio