Score one for the good guys in the never ending war against credit card fraudsters. That is because, using slick tools provided by Des Moines, Iowa-based The Members Group, the $1.5 billion University of Iowa Community Credit Union has announced a 16% drop in credit card fraud during 2011.
In a statement, UICCU also said it had “achieved significant per-case decreases in 2011 as compared to 2010. Year over year, the credit union has seen a 27% reduction in gross fraud per case and a 41% reduction in fraud write-offs per case.”
Key to this success, said TMG card expert Karen Postma, are new tools developed by TMG that correlate fraud probability with factors such as the ZIP code where the transaction is occurring and the kind of retailer. “Since I live in Iowa it is unlikely I would be buying an expensive big-screen television in a Florida discount store,” said Postma.
In the tool set implemented by UICCU, that transaction likely would be rejected, or at the least marked for review by a human analyst.
“We can get very granular in our fraud prevention analysis,” said Postma.
“The ZIP code strategy is a big help to minimizing our fraud losses,” said Chris Carlson, credit card manager at UICCU. “When we see a fraud trend we’re concerned about, we’re able to work with TMG to make tweaks here and there. But for the most part, the strategies set by TMG specifically for UICCU work well in preventing big fraud losses.”
Beyond just the where and what of the transaction, the tools are sensitive enough also to build in the individual cardholder’s spending history as well as the incidence of fraud at the particular vendor.
Good as all that sounds, it is premature to declare victory, indicated Postma. “The criminal fraudsters at whom these tools are aimed are very sophisticated. They work at understanding fraud prevention strategies and they modify their attacks accordingly,” she said
For its part, TMG said it continually tweaks its fraud prevention tools, to try to stay a step ahead.