Bank of America Suffers Breach Due to Poor Third Party Relationship

  • Fraud Prevention, Identity Fraud

This month, Bank of America suffered from a breach leaving their customers angry and confused. They chose the route of informing their customers via written letters and would not disclose an estimate of how many accounts were affected by this breach. Spokeswoman Betty Riess believes the breach may have been the effects of a third party partner. The company is now working on filling the gap in their security measures and mending relations with their customers.

The use of third party fraud prevention companies are becoming a trend in the industry, not only because of the pure volume of transactions but because they help aid in layered security for the FFIEC regulations. These third parties allow companies to concentrate more on the relationships with their customers while they outsource ID verification and authentication. Sounds like a perfect match right? Well, that convenience does not come without a trade off.

When choosing a third party vendor, there are two factors that can make the difference between a mutually beneficial partnership and a transactional nightmare. The first is the level of collaboration. Companies must express the importance of their customers security with the vendors to get everyone working towards the same goal. The entire fraud prevention plan must be secure from start to finish, and the more collaboration the better. The second is the use of real-time transactions. Third parties that store information in databases have a much higher chance of a breach than vendors using real-time transaction. Fraud prevention companies such as EVS that use real-time transactions never store customer information with greatly decreases the risk of a breach, better protecting from ID theft.