IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING OR CHANGING AN ACCOUNT WITH Border State Bank

Section 326 of the USA PATRIOT ACT requires all financial institutions to obtain, verify, and record information that identifies each person who opens an account or changes an existing account. This federal requirement applies to all new customers and current customers. This information is used to assist the United States government in the fight against the funding of terrorism and money-laundering activities.

What this means to you: when you open an account or change an existing account, we will ask each person for their name, physical address, mailing address, date of birth, and other information that will allow us to identify them. We will ask to see each person’s driver’s license and other identifying documents and copy or record information from each of them.

Fraud Protection

"Phishing" and "Pharming" are not what they used to be.

• “We suspect an unauthorized transaction on your account.
  To ensure that your account is not compromised,
  please click the link below and confirm your identity.”
  
• “During our regular verification of accounts, we couldn’t verify your information. Please click here to update and verify your information.”

PHISHING: Have you received email with a similar message? It’s a scam called “phishing” — and it involves Internet fraudsters who send spam or pop-up messages to lure personal information (credit card numbers, bank account information, Social Security number, passwords, or other sensitive information) from unsuspecting victims.
In a typical case, the consumer receives an e-mail appearing to originate from a financial institution, government agency or other entity that requests personal or financial information. The e-mail often indicates that the consumer should provide immediate attention to the situation described by clicking on a link. The provided link appears to be the Web site of the financial institution, government agency or other entity. However, in "phishing" scams, the link is not to an official Web site, but rather to a phony Web site. Once inside that Web site, the consumer may be asked to provide a Social Security number, account numbers, passwords or other information used to identify the consumer, such as the maiden name of the consumer's mother or the consumer's place of birth. When the consumer provides the information, those perpetrating the fraud can begin to access consumer accounts or assume the person's identity.

SPEAR PHISHING: A new type of online scam is "spear-phishing," which instead of sending out millions of fraudulent emails, involves actually targeting recipients. Spear phish frequently appear to be sent from a company's own human resources or information technology department

PHARMING: refers to the redirection of an individual to an illegitimate Web site through technical means. For example, an Internet banking customer, who routinely logs in to his online banking Web site, may be redirected to an illegitimate Web site instead of accessing his or her bank's Web site. A common Pharming method is:
The "pharmer" (the person or entity committing the fraud) attempts to take advantage of slight misspellings in domain names to trick users into inadvertently visiting the pharmer's Web site. For example, a pharmer may redirect a user to anybnk.com instead of anybank.com, the site the user intended to access.

The FTC suggests these tips to help you avoid getting hooked by a phishing scam:

• If you get an email or pop-up message that asks for personal or financial information, do not reply. And don’t click on the link in the message, either. Legitimate companies don’t ask for this information via email.
• Use anti-virus software and a firewall, and keep them up to date.
• Don’t email personal or financial information. Email is not a secure method of transmitting personal information. If you initiate a transaction and want to provide your personal or financial information through an organization’s website, look for indicators that the site is secure, like a lock icon on the browser’s status bar or a URL for a website that begins “https:” (the “s” stands for “secure”).
• Review credit card and bank account statements as soon as you receive them to check for unauthorized charges. If your statement is late by more than a couple of days, call your credit card company or bank to confirm your billing address and account balances.
  Forward spam that is phishing for information to: spam@uce.gov and to the company, bank, or organization impersonated in the phishing email.
• Forward spam that is phishing for information to: spam@uce.gov and to the company, bank, or organization impersonated in the phishing email.

Guidelines for Preventing Identity Theft

Identity theft—the misuse of personal information for financial gain—has become the fastest-growing crime in the country according to the Federal Trade Commission (FTC), costing Americans over $745 million annually. Between 500,000 and 900,000 U.S. citizens are robbed of their identity each year; and Minnesota ranks among the 10 states with the highest number of police reports taken in response to identity theft. According to the FTC, the most common types of identity theft complaints reported to authorities are:

• Credit Card Fraud
• Credit cards are opened in a victim’s name or unauthorized charges made to an existing card.
• Unauthorized Phone or Utility Services
• New telephone, cellular or another utility service is established in a victim’s name.
• Bank Fraud
• A new bank account is opened in a victim’s name, fraudulent checks are written or unauthorized withdrawals made from an account.
• Fraudulent Loans
• Personal, business, auto or real estate loans are obtained in a victim’s name.
• Government Document or Benefits
• Access is gained to a victim’s government documents, such as his/her driver’s license or Social Security Number; a tax return is filed fraudulently or government benefits are obtained through fraudulent means.

I.D. Theft: The Facts

Minnesota is among the 10 states with the highest number of police reports taken in response to identity theft. (Identity Theft Data Clearinghouse, Federal Trade Commission.)

Identity theft is one of the fastest growing crimes in the United States. In fact, in January 2002, the FTC announced that identity theft complaints far exceeded other areas of consumer fraud. More than 200,000 complaints were collected in 2001 from more than 50 law enforcement and consumer groups. (Pioneer Press, January 28, 2002.)

It is estimated that 500,000 to 900,000 Americans have their identity stolen every year. (Smart Business Magazine, December 2001/January 2002. And From Victim to Victor: A Step-by-Step Guide for Ending the Nightmare of Identity Theft, Mari J. Frank, Esq., 1998)

Identity theft is not against the law in many states. In fact, police departments may be reluctant to write a report on this type of crime. In most cases, the victim has the responsibility to prove his/her innocence. (Identity Theft Survival Kit: A Complete Package for Restoring Your Credit and Peace of Mind, Mari J. Frank, Esq., 1998)

12.5 months was the average time elapsed between the date identity theft began and the date it was discovered by the consumer. (Identity Theft Data Clearinghouse, FTC.)

According to the U.S. Secret Service, consumers and institutions lost $745 million in 1997 due to identity theft. (Identity Theft Data Clearinghouse, FTC.)

Identity theft doesn’t discriminate by age; individuals affected by the crime range from 18- 65+. (Identity Theft Data Clearinghouse, FTC.)

Consumer Guidelines for Preventing Identity Theft

Don’t provide your Social Security number or personal credit information to anyone over the phone unless you have initiated the call and are familiar with the business.

Tear up or shred all credit card receipts, bank statements and credit card offers before throwing them in the trash or recycling them

Protect your bank and credit card Personal Identification Numbers (PINs) and other passwords by changing them frequently, not using your Social Security number or birth date as your PIN, and not writing your PIN on your card.

Reduce access to your personal information by removing yourself from direct mailing lists at the three credit reporting bureaus. Deleting your name ensures that it won’t be sold to credit card companies or other institutions that could use it on a direct mail list. Add your name to the Direct Marketing Associations Mail reference Service and Telephone Preference Service, marking your name as deleted.

Keep a list of all credit cards, account numbers, expiration dates and customer service or fraud department telephone numbers in a secure place away from the cards for easy access if you need them.

Check your credit rating once a year.

Never keep your Social Security number in your wallet. Don’t print your Social Security number on your checks.

Check through your credit card and bank statements carefully and immediately report any unusual activity.

Cancel unused credit cards in addition to properly disposing of them.

Never type your credit card account number on the Internet unless you are sure it is a secure site.

Our Privacy Pledge to You

We will always value the trust of our customers and the importance of keeping their personal information confidential. Our employees will be held to the highest standard of conduct to ensure the confidentiality of our customers’ information. Border State Bank has never sold and will never sell confidential customer information to any outside company for marketing purposes.

As one of our valued customers, you provide us important information about yourself. We believe we have a responsibility to ensure the privacy of your personal information. While some financial institutions share their customer’s information, we are committed to keeping your personal information confidential.

We developed the following privacy policy to provide you the confidentiality you deserve. We promise we will adhere to these guidelines.

Notice of Your Financial Privacy Rights
We, our, and us, as used in this notice mean Border State bank. When we use the words you and your, we mean the following types of customer:

Our consumer customers who have a continuing relationship by purchasing or holding financial products or services such as:

• Deposit Accounts(s)
• Loan Account(s)
• Safe Deposit Account(s)
• Retail Installment Contract(s) or loans we hold and/or service.
• Product offered through a mortgage brokerage service
• Real estate settlement services

We will tell you the sources of information we collect about you. We will also tell you the measure we take to secure that information. First, we will define some terms.

Nonpublic personal information means information about you that we collect in connection with providing you a financial product or service. Nonpublic personal information does not include information that is available from public sources such as telephone directories or government records. Hereafter, the word “information: shall be defined to mean nonpublic personal information, as defined in this section.

Affiliate: An affiliate is a company we own or control, a company that owns or controls us, or a company that is owned or controlled by the same company that owns or controls us. Ownership does not require complete ownership. Rather, ownership means owning enough to have control.

Nonaffiliated third party: A nonaffiliated third party is a person we do not employ or a company that is not an affiliate (as defined above) of ours. This is also commonly know as an “other party”.

Information We Collect
We collect information about you from the following sources:

• Information you give us on applications or other forms
• Information about your transactions with us
• Information about your transactions with our affiliates
• Information about your transactions with other parties
• Information from consumer reporting agencies

Information We Disclose About You
We do not disclose nor do we reserve the right to disclose any personal nonpublic information about you to anyone, except as permitted by law. Examples of permitted disclosure include disclosures necessary to service your account, disclosures to consumer credit reporting agencies and disclosures necessary to prevent unauthorized transactions. We also may disclose personal nonpublic information about you with your express written consent or if you direct us to do so in writing, provided you have not revoked your consent or direction.

Confidentiality, Security and Integrity of Your Information
We restrict access to information about you to only those employees who need to know that information to provide you products and services. We maintain physical, procedural, and electronic safeguards to protect your nonpublic personal information.

Information About Former Customers
We do not disclose any information nor do we reserve the right to disclose any personal nonpublic information about former customer, except as permitted by law.

Notify Us of Inaccurate Information We Furnish to
Credit Reporting Agencies
Please notify us if we report to any credit reporting agencies any inaccurate information about your account(s). Your written notice should be sent to your local Border State Bank