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Citibank turns identity theft into a branding opportunity, a customer acquisition drive and a way to reduce operational costs in the back office.

It's a dubious distinction, but Citibank has now surpassed eBay as a target of phishing attacks, according to Wayne Malone, director, deposits & distribution, Citibanking North America, a division of Citigroup (New York, $1.26 trillion in assets), who spoke at a June conference sponsored by NCR.

Phishing attacks, by emulating bank communications to customers, entice customers to reveal their user IDs and passwords. Making matters worse, the bad guys have adopted cross-channel strategies similar to that of their financial industry targets. "We've just uncovered an IVR [interactive voice response] phishing scam asking people to call in instead of e-mail," said Malone. "If some of this brainpower was used in a constructive way, it would be tremendous."

In a classic case of turning lemons into lemonade, Citibank has taken its status as a target for scam artists and turned it into a branding opportunity, a customer acquisition drive and a way to reduce operational costs in the back office.

Centered around the topic of identity theft, Citibank's comprehensive media blitz - which includes television, radio, print, outdoor and in-store display ads - was designed to be relevant, differentiating and a motivating factor for consumers to switch banks, according to Malone.

The bank has between 200 and 300 people, mostly from the credit card operation, working to provide consumers with free, personalized assistance. Identity recovery includes filing police reports, notifying credit bureaus and establishing account monitoring on existing accounts. Although dedicated to identity theft, the identity recovery group also gets its fair share of calls regarding account fraud. Citibank offers a clear distinction between identity theft and fraud, in that identity theft involves opening a new account using personal data elements, while fraud acts upon an existing account.

Malone believes that this service puts Citibank out in front. "I don't know of any other bank that has a unit that walks you through and follows up with you," he said. "There was a clear niche that no one was addressing."

Furthermore, helping consumers to stop identity theft may have the virtuous effect of reducing back-office costs. Since discarded paper documents are often used to discover personal data elements used for identity theft, Citibank advocates the removal of account statements and checks from the banking relationship. "Paper is a big part of identity theft," asserts Malone.

While Internet banking does have its vulnerabilities from a security standpoint, Malone was sanguine about Citibank's ability to protect online customers. "The online piece, if done properly, is secure," he said.

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