CUs Expect to Spend More On Fraud
A recent NAFCU survey found that, on average, credit unions spent more than $165,000 each on card fraud prevention in 2010 and half of the executives responding to the survey said they expect to spend more in 2011.
The data for August's Economic and CU Issues Monitor was collected before Visa Inc. announced its updated approach to smart chip card technology. Smart chip cards have a significantly lower card risk profile than do cards that use magnetic stripe technology and they are expected to lower fraud prevention costs for issuers.
More than half the credit unions surveyed reported seeing their premiums for card fraud insurance increase significantly in 2010.
The survey found that the cost to close a card account that had been compromised by fraud and re-issue a new card on a new account averaged $5.18 per account for the CUs surveyed.
They also reported that 2,354 staff hours in 2010 were spent resolving card fraud issues on average at their institutions.