Global banking institutions are spending millions on marketing their brand of credit card. Retailers like Starbucks are announcing their entry into the affinity card craze.
Pioneers in the industry have realized for some time that you need to send a targeted offer to the correct individual to get them to sign up. This direct mail approach has gone off line and now is also growing on line.
Credit card marketers have grown on the Internet using affiliate marketing partners to expand their presence and reach across the digital world. The question now remains if these 3rd party marketing affiliates are subsidizing the potential for increased risk of ID theft.
What if the secure forms that you fill out on line to qualify for that new low interest credit card were being hosted by someone other than the bank itself? What if your vital personal identifiable information such as social security number, date of birth and mothers maiden name were being collected by these 3rd party marketers without your knowledge?
There are incentives and commissions being paid by large banking institutions to these 3rd party marketers to sign-up new customers. Millions of unsuspecting consumers are filling out these pre-qualified offers or searching on Google for credit cards for people with bad credit and being subjected to an "instant qualifier" ploy.
How many millions of records of unsuspecting consumers are being stolen, sold or diverted to entities that have one only one thing on their mind? To steal your identity to get more credit from another banking or lending institution in a fraudulent manner.
External fraud is an Operational Risk that could be more effectively mitigated by our financial services industry. The write offs are increasing because of the race for market share and the uncontrolled use of third party marketing affiliates.
We suspect that over the next few months the credit card industry is going to have to take a closer look at who they are paying to acquire new customers. They are going to audit their third party marketing affiliates to make sure that our personal information is protected and the controls are in place to safeguard it from theft.