Banks set up text, email fraud alerts for customers

The threat of electronic thievery has prompted a security strategy rethink at several US banks.

As part of a broader security initiative, Bank of America is offering to alert customers of any suspicious charges or changes to their account via email or text messages almost as soon as they occur.

Sanjay Gupta, the bank's ecommerce executive, said in a statement: "We're giving customers more ways to detect fraud and keep an eye on their accounts. They can decide what they want to hear about and where they want to be told."

Washington Mutual has also begun offering similar alerts. Both banks were among the scores of financial institutions forced to reissue thousands of debit cards in the past two months after hackers broke into the computer systems of a national retailer and made off with customer data - including PINs.

The robbers stole personal information belonging to as many as 600,000 debit-card holders, according to reports. Victims from numerous US cities filed complaints with police about unauthorised charges being made overseas.

The new alert system could help customers spot fraud early, which is key to preventing big losses.

Bank of America will notify customers about changes to their passwords or when a purchase tops a customer-selected dollar amount. Account holders can receive a daily update of their balance and choose whether the alert goes to their BlackBerry, Treo 650 or office computer.

Similarly, Washington Mutual emails customers when changes are made to a customer's home or email address, which could alert an account holder that someone is trying to hijack his or her identity.

A withdrawal that exceeds a certain amount or a balance that falls below a predetermined dollar figure will also trigger Washington Mutual's alert system, according to a spokesman for the bank.

Greg Sandoval writes for CNET News.com