Security Layering is the Way to Go, CUNA Mutual Exec Says
LAS VEGAS -- Ann Davidson of CUNA Mutual's risk management department said credit unions "really need to shut the door in [a fraudster's] face and not let them in."
The best way to do that is to layer security on debit and credit cards, she said. Fraud loss claims by credit unions last year approached $100 million up from $89 million in 2005 with no end to the increase in sight. Of these losses debit card losses increased 58%. "That's where we should be focused," Davidson advocated noting that ATM card losses fell 16% and credit card losses were down 27%.
CVV/CVC card verification tools are considered the top in fraud prevention today, but credit unions need to ensure the feature is switched on for its Visa and MasterCard logo debit/check cards; she said some are unaware that it even needs to be turned on and assumed the feature was engaged. Loss by counterfeiting accounted for 76% of losses, she noted. "Once you flip the switch for CVV your fraud for the magnetic stripe is stopped," according to Davis.
However, this on its own is not enough. Credit unions should also monitor card activity for unusual usage. "It's like the smoke alarm to tell you something's happening here," Davidson said.
She pointed to card activation measures that were taken to stop theft of cards from the mail. This type of fraud dropped to 1% after these measures that are now second-nature were put in place, according to Davidson. Again, she said, card activation is another layer of security.
Other prevention tools, aside from the ever-present PIN identification, included CVV2/CVC2, which is the three digit code on the signature panel; DCVV/CVC3 for contactless key fobs, which change for every transaction; name matching where the true owners name is encoded on the stripe; and
daily limits, which is particularly helpful with HELOC cards.