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CU System
Fraud stategies need summer brush up
DES MOINES, Iowa (6/23/10)--Financial institutions, including credit unions, need to gear up for summertime fraud by reviewing and updating their fraud strategies, Karen Postma, card risk senior manager for TMG (The Members Group), advises in the final chapter of her three-part miniseries on fraud. In “Card Fraudsters Get Tricky with Travel,” Postma counsels financial institutions to look for travel-specific strategies from their card providers to help fight fraudsters looking to take advantage of irregular spending patterns to hide their criminal activities. “A good travel strategy is a collection of sub-strategies that will analyze transactions for multiple types of fraud versus a simple suspend strategy that may increase an account’s vulnerability,” Postma said. Vacationing cardholders typically leave a trail of unusual spending transactions in their wake, and this is exactly what fraudsters are counting on. Knowing that financial institutions will be faced with a series of odd transaction reports throughout the summer months, criminals prey on issuers with an inability to distinguish fraudulent activity from typical travel-time spending, especially with purchases made at high-traffic destination locations, she said. “The unusual spending patterns of vacationers could cause a well-meaning card services representative to suspend an account at an extraordinarily inconvenient time for the cardholder,” Postma said. “A tiered-approach to a fraud strategy can help eliminate some of this kind of confusion.” Postma also noted that preventing travel-related fraud requires a cooperative effort between the card-issuing institution and the cardholder, and she outlines several methods the cardholder can employ. “The cardholder is always the first line of defense in fraud prevention,” Postma said. “But financial institutions should not take it for granted that their cardholders are fraud-savvy. They need to continue to talk with their customers about how to stay alert to fraudulent activity and the importance of making the financial institution a part of their summer travel plans.” For more information, use the links.
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