More on Bank of America lack of security
Posted on July 28th, 2008 by Jackie Danicki
I am stunned at what Amy Alkon seems to have discovered in her investigation of Bank of America. She buries the bombshell in a necessarily detailed post, but it’s a big one: California customers’ records do not seem to be included in BofA’s national database. If this is true, then it means BofA in California has no way of checking if you are who you say you are - they just hope that you’re telling the truth.
Filed under: Life
Well, the basic law of “The larger and more bureaucratic the organisation, the less basic competence it will have” is pretty clear, I think. While this is dreadful, many (most?) large banks are as bad.
One of the reasons banks do not want to prosecute fraud and do not want their customers whio are victims of fraud reporting it to the police is that they do not want the size of the problem (which is enormous) to become publicly known. It is known to Wall Street - securities laws require honest accounts and you can figure it out from reading banks’ annual reports if you understand the code it is written in - but not widely to the press and the public.
Which is not to say that some large banks are not better than others. Some clearly are. This sort of thing is widespread across the industry though.
The situation where you have lots of old computers systems that barely work on their own barely jury-rigged together as a consequence of mergers and partial upgrades and not really working together at all is completely normal, however. Payments systems are strange and often surprisingly primitive things.
I wonder what the bank regulators and the class action attorneys (for CA victimized account holders) will make of this….
Please note that Michael Jennings, who comments above, is a veteran of the banking and financial services industry.