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A former IT analyst at the Federal Reserve Bank of New York and his brother were arrested Friday on charges that they took out loans using stolen information, including sensitive information belonging to federal employees at the bank. Prosecutors allege that Curtis Wiltshire, 34, took out student loans totalling US$73,000 using the stolen information. His brother, Kenneth Wiltshire, 40, is charged with using the identities of two federal employees to try and obtain a loan for a 2006 Sea Ray 340 Sundancer speedboat. The charges (pdf) come two months after federal investigators found two 2006 student loan applications on a thumb drive attached to the work computer of Curtis Wiltshire, who had worked at the Reserve Bank for nearly eight years as an information and technical analyst. According to court documents, that investigation was unrelated to the fraud charges. Wiltshire was dismissed soon after the drive was found on around Feb. 15, prosecutors said. The charges were filed in the federal court in Manhattan. The two men could not be reached for comment Friday and the names of their lawyers were not included in the court documents. Curtis Wiltshire had "access to computer files containing information about employees of the [federal bank], including their names, dates of birth, Social Security numbers, and photographs," U.S. Federal Bureau of Investigation Special Agent Cordel James said in an affidavit filed in the case. Curtis Wiltshire was charged with bank fraud and identity theft and faces more than 30 years in prison if convicted. His brother was charged with mail fraud and identity theft and faces a maximum of 22 years in prison.

"A new study from the Pew Charitable Trust has found that every one of the credit cards offered by the country's 12 largest credit card issuers are bad deals for consumers and have practices the Federal Reserve has defined as "unfair or deceptive." The Trusts' Health Group's Safe Credit Cards Project, titled STILL WAITING: "Unfair or Deceptive" Credit Card Practices Continue as Americans Wait for New Reforms to Take Effect also compared credit union card programs and found them sharply better. "Although credit unions control only a small portion of credit card outstandings, comparisons between credit union and bank product models illustrate options available to consumers and potential benchmarks for future regulatory rulemaking efforts," the organization said. The observed credit unions presented a distinct alternative to credit card pricing and other practices of the observed banks, the report said. "In July 2009, median advertised interest rates on cards from the 12 largest credit unions were between 9.90 and 13.75% annually, depending on a consumer's credit profile-approximately 20% lower than comparable bank rates," the report said. "Meanwhile, credit union penalties were generally less severe than those of banks." "

A court has handed Blockbuster a preliminary defeat in a potential class-action lawsuit filed as a result of its participation in Facebook's ill-fated Beacon ad program, which notified members about their friends' e-commerce activity. U.S. District Court Judge Barbara Lynn in Dallas ruled that the case could proceed in court even though Blockbuster's contract with users calls for any disputes to be heard by an arbitrator rather than in court, and also says that users waive their right to file a class action lawsuit. Lynn determined that Blockbuster's contract with users was "illusory" because the agreement said that movie rental store could change the terms and conditions at any time. A Blockbuster spokesperson declined to comment on the case or state whether the company will appeal. The decision is a blow to Blockbuster because individual consumers would have had a difficult time bringing cases one-by-one against the company. But the decision paves the way for attorneys to argue that all consumers affected by Blockbuster's participation in Beacon should be able to proceed as a class. Internet law expert Venkat Balasubramani said Lynn's decision invalidating Blockbuster's user agreement was potentially far-reaching because many Web companies reserve the right to make changes to their terms of service. "It seems broad and could have impact on the terms of service used by a lot of different companies," he said.

Bring up the subject of digitizing medical records and you're likely to get a paradox of a discussion. Everyone thinks it will help save money and improve health care, and everyone has grave reservations. Get ready to hear more as a massive economic stimulus bill works its way through Congress, which includes IT health care spending measures. Although lawmakers are close to pulling the trigger. ensuring the privacy of patients' electronic health records (EHR) remains a top concern. "I very firmly believe that the Achilles heel of health IT is privacy," said Sen. Jim Whitehouse, a Rhode Island Democrat who chaired a hearing this morning examining the appropriate safeguards government should insist on before it doles out billions of dollars to help providers computerize patients' records. Champions of health IT argue that EHRs and interoperable systems to integrate data among providers would drive down healthcare costs while greatly reducing medical errors. Just 17 percent of physicians currently have even basic EHRs. The Center for Disease Control has estimated that as many as 98,000 preventable deaths occur in U.S. hospitals each year, many of which could presumably been avoided with more accessible patient data. "If 100,000 Americans were being killed by anything else, we'd be at war," Whitehouse said.

A third (34 per cent) of discarded hard disk drives still contain confidential data, according to a new study which unearthed copies of hospital records and sensitive military information on eBayed kit. The study, sponsored by BT and Sims Lifecycle Services and run by the computer science labs at University of Glamorgan in Wales, Edith Cowan University in Australia and Longwood University in the US, also found network data and security logs from the German Embassy in Paris on one purchased drive. Researchers bought 300 drives from eBay, other auction sites, second-hand stalls and car boot sales. A disk bought on eBay contained details of test launch routines for the THAAD (Terminal High Altitude Area Defence) ground to air missile defence system. The same disk also held information belonging to the system's manufacturer, Lockheed Martin, including blueprints of facilities and personal data on workers, including social security numbers. Lockheed Martin denies that the disk came from it. The arm manufacturer has launched an investigation that aims to uncover just how the sensitive data might have been wound up on the disk. Two discs bought in the UK apparently came from Lanarkshire NHS Trust, including patient medical records, images of X-rays and staff letters. Lanarkshire NHS Trust runs the Monklands and Hairmyres hospitals. In Australia, the exercise turned up a disk from a nursing home that contained pictures of actual patients and their wound photos, along with patient details. A hard disk from a US bank contained account numbers and details of plans for a $50bn currency exchange through Spain. Details of business transactions between the bank and organisations in Venezuela, Tunisia and Nigeria were also included. Correspondence between a member of the Federal Reserve Board and the unnamed banks revealed that one of the deals was already under scrutiny by the European Central Bank, and that federal investigators were also taking an interest. Yet anothe

Six federal agencies issued a set of frequently asked questions (FAQs) today to help financial institutions, creditors, users of consumer reports, and issuers of credit cards and debit cards comply with federal regulations on identity theft and discrepancies in changes of address. The "Red Flags and Address Discrepancy Rules," which implement sections of the Fair and Accurate Credit Transactions Act of 2003 (FACT Act), were issued jointly on November 9, 2007, by the Board of Governors of the Federal Reserve System (FRB), Federal Deposit Insurance Corporation (FDIC), National Credit Union Administration (NCUA), Office of the Comptroller of the Currency (OCC), Office of Thrift Supervision (OTS), and Federal Trade Commission (FTC). The rules require financial institutions and creditors to develop and implement written Identity Theft Prevention Programs and require issuers of credit cards and debit cards to assess the validity of notifications of changes of address. The rules also provide guidance for users of consumer reports regarding reasonable policies and procedures to employ when consumer reporting agencies send them notices of address discrepancy. The agencies' staff have jointly developed answers to these FAQs to provide guidance on numerous aspects of the rules, including which types of entities and accounts are covered; establishment and administration of an Identity Theft Prevention Program; address validation requirements applicable to card issuers; and the obligations of users of consumer reports upon receiving a notice of address discrepancy.

Beyond PCI: Other Regulations to Look For in 2009 Just a few days ago, the Federal Reserve, the Office of Thrift Supervision and the National Credit Union Administration announced the enactment of comprehensive new rules regarding card practices. These rules, which will not take effect until July 1, 2010, impose restrictions on a number of controversial issuer practices, including interest rate increases, late fees and double-cycle billing. Many industry observers predict that the rules will result in less credit being made available, and on stricter terms, than has been the case over the last several years. These rules may not be the end of the matter. Rep. Carolyn Maloney (D-NY), who in 2008 introduced the Credit Cardholders' Bill of Rights Act of 2008 (which sought to regulate many of the same practices as the then-proposed Fed rules), stated that she was disappointed in the delayed effectiveness of the Fed rules and promised to revive the Credit Cardholders' Bill of Rights in 2009 to, as she put it, "bridge the gap" between now and the effective date of the Fed rules.

Federal Reserve chief Ben Bernanke was among hundreds of victims of an identity fraud ring that stole more than $2.1 million from consumers and financial institutions across the United States, Newsweek magazine reported on its website. The head of the U.S. central bank and his wife were swept up in a case against the ring after her purse, with personal checks inside, was snatched at a coffee shop in August 2008, Newsweek reported, citing recently filed court documents. Someone soon began cashing checks on the Bernanke family bank account, a crime that became part of a wide-ranging federal identity theft investigation that was already underway.