IOWA CITY, Iowa (3/2/12)--Credit card fraud write-offs decreased more than 16% in 2011 at $1.4 billion-asset University of Iowa Community CU (UICCU).
UICCU also reduced gross fraud per case by 27% in 2011 when compared to 2010 and reduced fraud write-offs per case by 41%.
The drop in fraud write-offs was the result of changes made to the credit union's fraud strategies over three years, according to a joint release from UICCU and The Members Group (TMG), Des Moines.
Changes included adjustments to ZIP code, travel, country code and compromised account strategies.
TMG created a customized ZIP code strategy for UICCU that calculates the number of miles between a retailer and the cardholder's home address, allowing the credit union to halt a transaction in real time if the transaction is too far away from home and the merchant falls into a high-risk category.
The credit union also customized its strategy for members who travel. Instead of removing all blocks from the traveling member's account, the new approach routes red-flag transactions to an in-house work center for review by a fraud analyst.
When a member travels to a country whose code is blocked to prevent fraud, UICCU asks TMG to lift the block, but only for the shortest time period possible.
Instead of adding compromised accounts to Visa and MasterCard warning bulletins, which prevents cardholders from using their cards, UICCU reissues new plastic cards. This allows the account to remain open for several days to eliminate the gap in service to the member.
A UICCU spokesman said the slight additional risk created by omitting the cards from the warning bulletin is outweighed by cost savings and uninterrupted service to members.