On May 22, 2006, the U.S. Department of Veteran Affairs (VA) published a notice that electronic data on approximately 26.5 million veterans and some spouses may have been compromised. The VA is working with law enforcement, Congress, the media, veteran services, and other government agencies to ensure that veterans and their families are protected against potential misuse of that data. Please refer to the VA Web site at www.va.gov for additional information on this security incident. While no specific fraud related to the VA incident has been detected, the growing trend of data breaches occurring in both the private and public sectors raises concerns that personal information may be used to commit identity theft.

The FDIC, as a member of the President's Identity Theft Task Force, urges financial institutions to be vigilant against the misuse of personal information for both new and existing customers. Additionally, financial institutions have an obligation to verify the identity of persons seeking to open new accounts and to safeguard customer information against unauthorized access or use.

The FDIC, both independently and jointly with the other federal bank regulators, has issued guidance on steps financial institutions can take to protect customers from identity theft. This guidance can be found by searching the FDIC's Web site using the term "identity theft" at: http://www.fdic.gov/news/news/financial/search.html.

In addition to regulatory guidance, the Fair and Accurate Credit Transactions Act of 2003 (FACT Act) requires federal bank regulators and the Federal Trade Commission to issue implementing regulations regarding compliance with the law's provisions to combat identity theft, protect privacy, and improve consumer access to and overall accuracy of consumer credit reports. More information on the FACT Act can be found on the FDIC's Web site at: http://www.fdic.gov/news/news/financial/2004/fil13004.html.

Additionally, information for consumers on how to prevent identity theft and steps to take if an individual becomes a victim can be found at the Federal Trade Commission's Web site at: http://www.consumer.gov/idtheft.

For your reference, FDIC Special Alerts may be accessed from the FDIC's Web site at www.fdic.gov/news/news/SpecialAlert/2006/index.html. To learn how to automatically receive FDIC Special Alerts through e-mail, please visit www.fdic.gov/about/subscriptions/index.html.

Distribution: FDIC-Supervised Banks (Commercial and Savings)

Paper copies of FDIC Special Alerts may be obtained through the FDIC's Public Information Center (1-877-275-3342 or 703-562-2200).