I read that if somebody steals your identity, and uses it to open bank/credit accounts, that the banks are criminally liable (fraud). Is this correct?
Need answer fast?
It would sure be nice if, in the United States, any bank or merchant or other similar organization were held at least civilly liable if they open an account the proves to be a false identity. This would put pressure on companies that open accounts to be very sure that they verify identity first.
The current rule seems to be, that if crook A steals identity of citizen B and opens account in the name of B (at a bank, department store, wherever), and causes much damage to B’s financial and credit rating, then legally B (and not the company) is the victim. That is, B bears the loss.
In fact, banks will typically absorb the loss and restore B’s standing. But we hear no end of horror stories about the difficulty and hassle B must go through to accomplish this; and B’s credit rating may be trashed for a long time anyway.
If the law would simply hold the company liable for opening an account without adequately verifying the customer’s identity, the identity theft problem would go away overnight.
No I don’t think so. How could a bank be committing fraud by doing this? Who are they deceiving?
Perhaps what has started the rumour is that Australian banks mustn’t open accounts without being shown a lot of ID. No doubt there are penalties that apply if they do not do so.
Senegoid you contradict yourself. Your second paragraph is wrong as you point out in your third.
Definitely not true.
If someone was able to present the appropriate level and standard of documentation required under legislation, without it being obviously forged/wrong, there isn’t going to be any criminal charges laid against the bank.
Even if the bank/employee breached the requirements for identification, that could be another matter, although I still very much doubt it would result in fraud action, but it would certainly attract attention from APRA (Australian Prudential Regulation Authority) the bank watchdog in Australia.
The bank will in either case have to wear any loss generated by the identity theft though - the poor victim who lost his identity can’t be held liable for any debts incurred in this fashion. Although as Senegoid has said that is not always an easy process unfortunately, as you would be typically dealing with some fairly monolithic, highly bureaucratic, companies.
For reference as to how I can be certain, - I’ve been working in the Australian banking industry for 20 years. 