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Credit card fraud will always be an unfortunate part of the industry. In 2010, fraudulent activity represented a $14 billion loss to the credit card industry. But cutting-edge tools such as real-time decision making, controlled block strategies, and VIP indicators are helping credit unions mitigate fraudulent transactions.
As fraudulent activity continues to become more technologically advanced, it is more important than ever for credit unions to stay out in front of the latest fraud trends. In a white paper published by Javelin Strategy & Research in April, credit unions were warned of the top ten fraud trends for 2011, which included card-not-present, ATM and POS skimming, data breaches and complex social engineering schemes. All of these techniques pose a unique threat for credit unions and their members.
Today’s broad spectrum of fraud management tools makes it easier for any credit union to customize services to fit their member’s specific needs. Armed with the appropriate tools and information, credit unions across the country are helping keep their members financial information safe and secure amidst increasing levels of attempted fraudulent activity.
The Tools to Stop Fraud
Controlled block strategies make it possible to block transactions that come from areas in which high volumes of fraud have developed. These areas can include geographical locations, specific industries and any other problematic areas that might arise. VIP indicators allow credit unions to take protection a step further and set parameters that allow specific holders the ability to use their cards even in high fraud areas. For example, cardholders planning to travel to geographical locations with large amounts of fraud can have their cards programmed to only be used within the travel and tourism industry and have all other transaction types blocked during their vacation.
When fighting fraud it is imperative to find the balance between strong mitigation tactics and ensuring the best possible user experience for cardholders. Although there will always be “false positives” when trying to protect members, the right tools can help credit unions of all sizes achieve success.
Stopping Fraud Successes
"We have seen incredible success rates when utilizing tools such as real-time decision-making to help protect our members," said James Heile, Assistant Vice President of the Card Services Group with Members 1st Federal Credit Union. "If you don’t have access to fraud management tools of the 21st century, you need to partner with someone who does."
Real-time decision-making isn’t the only tool Heile and his team is using to keep their members’ financial information secure. "During a recent flurry of fraudulent activity in North Carolina, we were able to block $65,000 worth of attempted fraud over a six day period," Heile said. "We could not have done this without vigilant data monitoring and proper implementation of controlled block strategies and VIP indicators."Heile and his team provide just a few examples of successes that can be achieved through the use of a balanced fraud management portfolio.
Implementing Your Own Fraud Prevention Plan
Fighting fraud is more than keeping your members information safe. It is about preserving their peace of mind. As the largest card processing association for the credit union industry, CSCU consistently provides their more than 3,000 member credit unions with the resources necessary to succeed in every facet of today’s ever-changing financial industry. Fraud is no exception. CSCU member credit unions have access to the most sophisticated fraud-fighting tools on the market.
Through a dedicated commitment to member credit unions, CSCU offers member credit unions the tools and resources to stay in front of the latest industry trends, provide responsive service and offer complete card processing solutions.
Make sure you have the right tools in place to protect your credit union from fraud. For more information visit http://info.fisglobal.com/cscufraud.
July 18, 2011
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