Guest Commentary By Ryan Dutton, SHAZAM Fraud Operations Manager
Fighting Fraud: An Inside-out Approach
It’s a dark, relentless and multibillion industry in the U.S., threatening your accountholders and you.
While the technologies to fight fraud are improving, so are the fraudsters. Today’s fraudsters aren’t amateur hackers. Fraud is being carried out by organized criminal groups, domestic and foreign.
It’s an ongoing battle, and it’s one we must fight on several fronts. SHAZAM advocates a more holistic approach to fighting fraud.
LOOK INSIDE YOUR OWN WALLS Review and tune your daily limit settings regularly. It sounds simple, but many times, fraud happens within the daily limit. If you’re reluctant to limit your cardholders across the board, keep in mind that each card can be customized with a different limit according to use. Cards used for business purposes or people who travel frequently may warrant a higher limit than regular use cardholders. Keeping daily thresholds lower, yet reasonable, can prevent large losses for you while minimizing inconvenience to your customers.
Use artificial intelligence to help your bank detect and block fraud. Learn about your customers’ habits and spending patterns to identify potentially fraudulent purchases in real time. Learn your customers’ habits and spending patterns to identify potentially fraudulent purchases in real time. Blocking transactions from certain countries or states can significantly reduce fraud. Identifying specific dollar amounts that fraudsters are using to test your defenses or specific merchants the fraudsters use to try to extract money from your customers’ accounts can be an effective line of defense.
EMPOWER CARDHOLDERS Your customers can be fraud fighters, battling on the front line against fraud. However, they must be informed and aware. And, they need the tools to do the job. Share simple, effective messaging with cardholders so they know what to look for when using a card at an ATM, inside a business or at an automated fuel pump. Tis multiplies the number of eyes looking for signs of compromise.
Allow cardholders to set their own alerts or blocks by putting a mobile app in their fraud-fighting hands. Cardholders receive immediate alerts to potentially fraudulent activity via email and/or text message. It’s an added layer of protection with convenience, speed and security all in one app.
Remind your accountholders of best practices, like using reputable merchants and secure online sites, and never, ever giving sensitive information by phone, email or online.
When you send out a new card, include clear activation instructions. Once the card is active, be sure your processor verifies expiration dates on transactions. Your processor also should have a set of specialized notifications for online, out- of-town or larger purchases so they can be approved quickly. Encourage your accountholders to notify you about pending large purchases to avoid declines.
BUILDING COMMUNITY NETWORKS AGAINST FRAUD Create a community of fraud fighters. Engage your small business clients, merchants, law enforcement and even lawmakers in this fight. When merchants know what to look for, they can help stop fraud at the point of sale. When law enforcement knows what they are looking for, they’ll know how to respond.
Host a community fraud forum. Invite these fraud-fighting partners together for a discussion on how to battle fraud.
Tap into your state and national associations to see what’s being done at these levels in the fraud fight.
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mobankers.com
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