Schwab puts its money behind ID protection


Leading brokerage house Charles Schwab has issued a complete money-back guarantee for losses due to identity theft.

"We want you to have the highest level of confidence when you do business with Schwab," the broker said on its company website. "So we offer you this simple guarantee: Schwab will cover 100 percent of any losses in any of your Schwab accounts due to unauthorized activity."

In a statement on its website, the firm said it will automatically provide account guarentee to all employees. The company also has created a public assistance telephone hotline for customers who believe they are the victims of identity theft.

The guarantee applies to all Schwab products, as well as its retirement plan accounts.

Charles R. Schwab, founder and chief executive officer, cited cybercrime concerns in a Wednesday statement.

"It has always been our practice to make clients whole in cases of unauthorized account activity. Our new security guarantee turns that historic practice into a public promise," he said. "We have a broad array of internal security systems and measures in place that protect the safety of client accounts at Schwab. Given rising public concerns over identity theft and cyber-fraud, we think adding a clear and simple guarantee will contribute to even greater piece of mind for our clients."

Consumers have repeatedly shown a sense of unease about online shopping and financial services.

The 2-month-old America Online/National Cyber Security Alliance online safety study showed that nearly 25 percent of PC users are targeted by phishing attempts on at least a monthly basis, and 70 percent of consumers believed the fraudulent emails they received were from a legitimate company.

A report issued by the Unisys Corporation in November of last year said that 45 percent of consumers worldwide were willing to shift their business to financial institutions that offered more security safeguards. Sixty-six percent of respondents to that study worried about the fraudulent use of bank and credit card accounts.

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