End of Privacy Sought by Government

"Privacy no longer can mean anonymity, says Donald Kerr, the principal deputy director of national intelligence. Instead, it should mean that government and businesses properly safeguard people's private communications and financial information" (Associated Press (AP), Yahoo! News).

Privacy (noun) = the government knows everything about you--but keeps it a secret from you.
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FNBO Blunder: Due Diligence 2nd Request Email

FNBO achieved the seemingly impossible: It created a run on an FDIC-insured bank.

"Security" Measure Creates Mass Insecurity

FNBO Direct followed its previous threat to keep customers’ money with this new threat:

As part of your initial application, we did not receive information regarding your current employer, occupation or position. In many cases, this is because you have a status of retired, unemployed or self-employed. We are updating our records as part of our on-going due diligence to be compliant with our standards to support the USA Patriot Act.

Due to the importance of the USA Patriot Act, we have placed a hold on your account(s) until we can document this information for our records. No deposits or withdrawals can be made through your account(s) until we receive this information. We will release the hold upon receipt of this information.

Please provide us with your previous employer, occupation and position by sending an email with this information to fulfillment@fnbodirect.com. If this information is not received within 30 days, the account(s) may be closed. Your immediate attention to this matter is appreciated.

If you wish to discuss this further, please send an email to fulfillment@fnbodirect.com or call 877-370-3707. Please reference your FNBO Direct account number displayed at the top of this page when you contact us.

Thank you for choosing FNBO Direct for your Online Savings Account.

FNBO Direct Customer Service

Problems:

• The email does not state that any law requires these actions. FNBO only states that you must comply with "our" (FNBO's) standards (if a law does require them, that topic is for another article).
• Having money is not prima facie suspicious, unless you want to be subject to interrogation every time you pull a bill from your wallet: Do you have a receipt for that dollar? Millions of people have something called “savings” from past jobs. Maybe some bankers have nothing better to do than interrogate retired Grandma and the self-employed teenage babysitter.
• The email starts by stating that FNBO does not have your “current employer” but then asks for your “previous employer.” FNBO apparently does not even know what it wants.
• FNBO’s action is not due diligence. It is closer to no diligence at all. If FNBO is so worried about Grandma’s “suspicious” money, it should verify or deny before accepting her money, not after, so she can take her pension elsewhere. FNBO’s sequence of actions shows that it has few qualms about receiving Grandma’s “suspicious” money; it just dislikes giving Grandma her money back.
• Some posts on the web claimed that providing more information had solved nothing so the only ray of hope for the customer is that FNBO "may" close your account if you do nothing and do not provide the information, so at least you might get your money back--a month later--maybe (hope you did not need it to pay bills anytime soon).
• The email reads like a classic phishing scam when a con artist impersonates an institution to steal your identity, this time invoking FNBO and the PA instead of the Bank of Nigeria. Many businesses state that they would never send such an email asking for such personal information by email.

How To Make Things Worse: What FNBO Direct Did with Its Policy

• FNBO actually managed to damage itself further by taking its bad policy and then mistakenly applying it to customers who already had provided employment information, when on August 10 it sent the above email (with its confusing, out-of-the-blue "2nd Request" title) to an untold number by accident.
• FNBO then took almost 3 hours to issue an apology email, amidst a flurry of complaints from irate customers.
• FNBO still did not learn its lesson because its "apology" only told customers to disregard the last email but in the next breath warned that it still could freeze your account and send you a similar email at any time: "If Due Diligence information is required, you will receive a follow-up email."

Meanwhile, FNBO Direct customers peppered internet forums and blogs with announcements that they were withdrawing their money and closing their accounts as soon as possible.

FNBO achieved the seemingly impossible: It created a run on an FDIC-insured bank.

You Decide: The Best Con Artist Is . . .

An amateur or garden-variety fraud or con is when you find out too late that the fraudster emptied your bank account or stole your investment and disappeared. This is sloppy for the fraudster because now he/she is "wanted" by the law.

The "best" con artist is the worst for everyone else's safety.

The "best" con artist is the one who cons you so well that you do not realize that you have been conned, you profusely thank him/her, you eagerly return to be conned again an again, and you enthusiastically recruit your friends as new victims.

Millionaire Artist wrote:

“Girl power”, my [a@@]. I couldn’t decide what was more disturbing. Was it the fact that these women each paid $5K to join a pseudo-sorority for adults? That they felt a need to pay for friends? That they felt a need to pay for compliments? That what they “bought” boiled down to “self-esteem packaged for the idiotic”? And, oh lord, how self-congratulatory they were! They really thought they were doing something to improve themselves and the lot of women. “Your successes are successes for women everywhere,” said the Guru . . . .

What is the best con or who is the best con artist?

Remember that the best con will be very popular in a Gallup poll.

You decide: Is it a government program? "education"? real estate? cars? clothing?

(Uncivil comments are not welcome but "unpopular" comments might be necessary.)

Opt-Out of Junk Mail To Stop Identity Theft

Get Rich Slowly posted 2 useful links to stop unwanted credit offers and junk mail. You can use these opt-outs to prevent identity theft since dumpster diving for thrown-out junk mail (even ripped applications) is a tactic of identity thieves.

Credit bureaus opt-out from credit offers such as pre-screened or pre-approved credit cards (Federal Trade Commission (FTA) endorsed), or call 1-888-5-OPTOUT

Direct Marketing Association (DMA) opt-out from junk mail

See also: List of Identity Theft Blockers: How Many Do You Use?

List of Identity Theft Blockers: How Many Do You Use?

Here is a good list of precautions to take against identity theft from privacyrights.org.

I am still trying to find if various credit blockers will interfere with opening savings accounts.

Freezing Credit To Stop Identity Theft: Good or Bad for Savers?

A chastity belt for your financial reputation

Many readers of this blog probably have little interest in taking new debt and might be interested in the "credit freeze" which guards against identity theft by preventing anyone from opening new lines of credit without special permission.

My understanding is that you (or even an identity thief) could use your current credit card as normal but you would have to unlock your credit before getting new cards or opening a mortgage in your name. That sounds fine for people who dislike debt and rarely take new debt or rarely open new credit lines.

Does the credit freeze harm savers?

My question is: Since banks can run soft or hard credit pulls even when you give the bank money, will the credit freeze interfere with opening deposit accounts (savings, money market, CD) to save or invest money?

Do any of you financiers know the answer?

You Know Your Identity Thief

The Wolf in the Fold

Victims of identity theft often find that someone they know has committed the crime. Roommates, hired help, and landlords all have access to your home, and it is possible for them to access private information. Identity theft within families is also fairly common. This causes particular difficulties, because victims may be reluctant to notify the authorities or press charges. People are especially vulnerable when ending relationships with roommates and spouses (FRBB).

Handing your credit card number to a waiter or mail-order representative is necessary to charge something but I have raised an eyebrow when hearing that someone lent a credit card to a friend. Honest people sometimes get surprised by fraud because they go about their day without deception in mind. The other pitfall is the relationship that goes sour. Potential spite and revenge are good arguments against joint accounts. The identity-theft issue fits with long-standing debates about lending money to friends and merging finances with spouses.

Next: Freezing Credit To Stop Identity Theft: Good or Bad for Savers?

FNBO Might Decide To Keep Your Money

I mentioned FNBO's assertions that it can keep your money indefinitely and Bank Deals posted that he will attempt to test withdrawals (thank you), although he did not mention the amount.

• Small amounts will test nothing. People want to know if they will miss their house closing when they need to withdraw 5 figures or close the account.
• FNBO claims that it can refuse to transfer to accounts that it previously approved and used.
• FNBO claims that it can refuse to mail a check to your physical address or even hand your money to you in person (the FNBO email warning did not limit itself to bank accounts).

Did FNBO Steal Your Money?

Has anyone been unable to get their money back from FNBO?

Here is what FNBO lets you know in an email after you have deposited money:

Because security of your account is important to us, we want you to be
aware of one of the steps we take to maintain security: We may temporarily
restrict all deposits to and transfers from your FNBO Direct account if we
determine a security risk exists and we may refuse to complete any transfer
based on the existence of a security risk. Please see the "Note about Linked
Accounts" and the "Important Note about Security for Deposits and Transfers" in
the updated Disclosures for your account here. Corresponding changes are
contained in Sections 7 and 12 of the Online Services Agreement and Section 6 of
the Deposit Agreement, all found in the Terms and Conditions here.