HSBC has topped a list of the banks experiencing the most ID theft problems in the US.
In the list, HSBC was trailed by Bank of America and Washington Mutual, having the highest incidence of fraud per billion dollars of deposits in 2006. The research was compiled by Chris Hoofnagle, a senior fellow at the Berkeley Center for Law and Technology, part of the University of California.
HSBC’s fraud rate was 21 incidents per billion dollars, the report estimated, based on fraud complaint figures from the Federal Trade Commission for January, March and September 2006. This was followed by Bank of America/MBNA at 18.
Among the largest 25 banks, ING was the subject of the least fraud complaints, with 0.085 fraud incidents estimated in the year.
Hoofnagle warned: “There is no reliable way for consumers, regulators and businesses to assess the relative incidence of identity fraud at major financial institutions ... In order for the market to effectively address the ongoing identity theft epidemic, consumers need reliable information about the incidence of crime among institutions.” But he added that the research was “a first attempt to meaningfully compare institutions on their performance in avoiding identity theft”.
Nevertheless, the news marked the end of a difficult week for HSBC in the US, where bad debts among consumers slashed that division's profits from £2.4bn in 2006 to only £46m last year. HSBC said that across the group, where profits rose to £12.2bn, IT remained a crucial part of its strategy, in spite of declines in internal IT service levels in Europe, Hong Kong and Latin America.
In the UK, HSBC also admitted it was at fault for a 6 hour intermittent outage for its customers using Mastercard's Maestro payments system, after it ran a software upgrade to its telephone banking.