Focused on card fraud prevention

Transcription

1 Focused on card fraud prevention

2 The evolution of credit card fraud As EMV adoption increases, counterfeit cards are harder to create and use 76% decrease in counterfeit fraud at U.S. chip-enabled merchants* 97% of U.S. payment volume used EMV cards (as of March 2018)* The decrease in counterfeit fraud and increase in EMV card access has caused a shift to alternative card fraud techniques. What is EMV? (Euro MasterCard Visa, a.k.a. chip cards, smart cards, chip/pin, etc.) EMV cards with chips are more secure than those with a magnetic stripe alone. The EMV chip code changes with each transaction whereas the magnetic stripe code is static. This changing code makes it harder to create counterfeit cards. EMV is part of a solution but not a cure for the epidemic of fraud that is plaguing payments and commerce. 2 *US EMV Migration Summary, March 2018

3 Shifting fraud threats create new challenges Fastest growing methods of card fraud 1 Card not present (CNP) fastest growing type of card fraud transaction occurs without the physical card present via phone, mail, internet or other electronic means 2 Fallback bypassing chip security when a chip card is used at a chip-reading device, but the cardholder uses the magnetic stripe or has the card manually keyed allowing counterfeit card use 3 Account Take Over (ATO) using a person s account information to purchase products and services Masquerading, phishing and smishing are used to get personal information and create new accounts 3

4 Fraud threats continue to shift 4

5 Fallback is key to bypassing chip card security 5

6 Account Takeover and Automated Fuel Dispenser Fraud 6

7 Built in fraud protection Layers of security features to prevent, detect and monitor fraud Production security features: Cards are embossed at a secure production facility under a dual custody process. Reproduction protection: Physical features such as holograms, embossed account number on front, printed account number on back and secure algorithms within the magnetic stripe further protect your cards. Systemic controls: A sophisticated application authorizes only the transactions that clear the specific parameters you define for each card. Early fraud detection: We automatically monitor account activity for potential fraudulent activity and contact cardholders to verify legitimacy of transactions. 7

8 Steps to verify and resolve fraudulent charges Fraud servicing scenarios When activity is flagged: When posted fraud charges require credit: 1. An outbound call is placed to the primary contact to verify activity 2. If no answer, an outbound call is placed to the secondary contact 3. If no answer at either telephone numbers or phone attempts can not be made, an is sent to primary contacts to ask for a return call 1. Following fraud confirmation, the account will be closed and each transaction transferred to new account 2. All transactions will appear on the new account number billing statement or your reporting tool 3. Fraud will send a fraud statement to the Program Administrator or cardholder via , fax or regular mail 4. Program Administrator or cardholder may be asked to complete Fraud Affidavit to comply with VISA and Mastercard regulations 5. Credits for individual fraud transactions will appear on new account for balance reconciliation. Once the credit is applied to the account, the claim is resolved Client action Call the Fraud department at or collect The department is available 24/7 to assist with questions or verification. 8

9 Balancing fraud risk and client satisfaction Fraud attempts will continue to occur, but our focus is on minimizing their impact. Let s work together to achieve a long-term, sustainable business model 1 Gather accurate contact information for your cardholders including address and phone number(s) 2 Enroll in account activity alerts when available 3 Require fraud education and training, including phishing and masquerading 9

10 Cardholder role in preventing credit card fraud Actions you can take to reduce the risk of card fraud Use your chip whenever possible request it when chip reader is available Know your PIN many transactions declined due to incorrect PIN Receive mobile alerts for real-time visibility into potentially fraudulent transactions when functionality becomes available Verify name, address, and CVV (3 digit code) for online transactions many transactions declined due to incorrect data Report any suspicious card activity immediately 10

11 Organization role in reducing credit card fraud Actions businesses can take to reduce chances of card fraud Expand virtual payment solution spend Differentiate user names and passwords across platforms Establish MCC controls, defined cardholder benefits and activity alerts Segregate card request and approval duties Review transactions and report suspicious transaction activity to bank immediately 11

12 Successfully combating card fraud State of Florida will find confidence in our innovative, layered approach to preventing and addressing fraud. Fraud detection and resolution 12 ZERO liability for external fraud impacts Fraud protection and monitoring Dedicated team tracks trends and reviews activity Account activity alerts through SMS, or phone Real-time notification of transactions when available Employee misuse insurance Consistent coverage as a best practice, as available in global markets Program control and spend monitoring Exception reporting based on MCC codes IDENTIFY Suspected fraudulent activity is targeted by the use of advanced fraud rules. ANALYZE Our Fraud Analysts review transactional patterns that may indicate fraud. CONTACT When fraud is suspected, Fraud Analysts contact clients to validate transactions. REMEDIATE In the event of fraud, the account is closed, a card is reissued and claims are processed quickly.

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