Fraud and identity theft are enabled by two faulty assumptions about the way that the identity of a person is verified in our society. The first is that someone who demonstrates knowledge of certain items of personal or financial information about a particular person is presumed to be that person. The second assumption, which gives rise to the first assumption, is that these items of information can be kept confidential. Because fraudsters and identity thieves often seek to use their victim's personal and financial information, this invention proposes a direct authentication system and method that does not depend on these assumptions. The proposed method enables businesses to determine whether the customer is truly the person who he says he is by adopting a new “two-factor” authentication technique and authenticating customer's identity utilizing customer's trusted authenticator. A customer's trusted authenticator can be found within the financial services community; in particular, a bank or other financial institution with whom the customer has a trusted relationship, such as a bank account.