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5 best practices for fighting fraud

posted by Liz Little (Retired) on Wednesday, October 31, 2018 in SHAZAM Blog

Fraud trends are ever-growing and ever-changing. Just when we have a handle on a current trend, a new one emerges. It’s important to be as vigilant as possible in identifying new trends, while at the same time not impacting your cardholders’ valid purchases.

Implement these best practices at your financial institution to help identify fraud incidents and reduce losses.

1. Implement a fraud detection service

Secure a 24/7 service that reviews all transaction activity and either declines suspicious transactions, creates cases or both. Educate your cardholders to use their PIN whenever possible to reduce red flags on valid purchases.

2. Encourage cardholders to set alerts through mobile channels

Cardholders can use mobile banking applications to set alerts for specific transaction activity. If they receive an alert for a transaction they didn’t make, they can immediately restrict their card.

3. Provide a 24/7 phone number to report fraud or lost/stolen cards

Giving cardholders a 24/7 phone number to report a card that’s lost or stolen or if they’ve identified fraud is important. Suspected fraud can be reported immediately, and the card can be turned off.

4. Join — or start — a local fraud group

As a member of a local fraud group, you can network with local merchants, law enforcement and other financial institutions to learn of others’ experiences, share tips and hear about possible scams. If your community doesn’t have a local fraud group, start one.

5. Keep daily limits low, but manageable

Having extremely high daily limits puts you at risk for large losses. Most cardholders, even if they use their card every day, do not spend hundreds or thousands of dollars on a daily basis, but the fraudsters will! Keep limits low, but manageable for cardholders.

With more and more payment options, the potential for fraud increases. By educating your cardholders and staff, together we can stay ahead of fraud and lower your risk.

About the Author

Liz Little works alongside banks and credit unions to help them effectively manage fraud preventative techniques. By researching the latest fraud trends in the EFT industry, she can guide SHAZAM participants with strategies to prevent fraud and mitigate risk.

SHAZAM, Inc. and ITS, Inc. provide this blog for general informational purposes only. Our blog may be shared by a direct link wherein the content remains as originally presented and has not been altered. SHAZAM, Inc. and ITS, Inc. assume no responsibility for errors or omissions in the contents on the blog. By using this blog, reader agrees that the information published does not constitute nor is a substitute for legal advice which should only be sought from a qualified, licensed attorney.