Two Credit Unions’ Proactive Approach to Fighting Plastic Card Fraud

Everyone in the credit union industry is familiar with the recent Target breach affecting 120 million customers. However, more localized, lesser-known breaches occur daily all over the country. While some credit unions rely on VISA CAMS alerts or news stories to notify them of a possible breach, others stay one step ahead of the pack by identifying these breaches before fraud occurs.

This proactive approach to pinpointing cards at risk led One Nevada CU to identify “eight local/regional data breaches or skimming cases in the last three years,” Vice President Lee Torres said. “These breaches could have potentially affected hundreds of One Nevada Credit Union debit cards, for a cost savings of nearly $78,000.”

How did they manage to identify these breaches? One Nevada CU implemented Advanced Fraud Solutions’ TrueCards® as a part of their card management protocol.

Advantage FCU in Rochester, N.Y., also utilizes TrueCards to identify plastic card breaches and the common point of compromise, mitigating losses on its card portfolio. “Using TrueCards®, we had a complete list of affected cards within hours of the Target breach announcement,” Manager of Audit, Risk & Compliance Mike Wess said. “We were able to immediately address potentially fraudulent activity on our cards, without having to wait two days for the VISA CAMS alert.”

“When instances like the Target Breach occur, the fraud doesn’t always occur right away,” cautions Advanced Fraud Solutions CEO Lawrence Reaves. “There is always a chance that fraudsters will sit on the data for months or even years, until either the card expires or a new one is issued.”

The TrueCards CPC locator gives financial institutions the tools they need to realize the common point of compromise when members report fraudulent transactions. The merchant search tool then allows the fraud investigator to compile a list of all other cards used at that merchant during a specific time frame.

“TrueCards’ robust real-time information allows for a preemptive strike, rather than relying on strategies after it’s too late,” Reaves continues.

Using that approach, One Nevada CU was able to work with local police to identify an employee at a local fast food chain who was skimming cards at the drive-through window. Additionally, they identified 200 cards at risk because of a skimming device at a local gas pump. “In those instances alone, we were able to save an estimated $56,000,” Torres said.

Torres attributed the thirty percent decline in net fraud losses over the last two years to a combination of “fluid risk management practices and the implementation of TrueCards. We were able to pay for TrueCards with fraud savings within the first year.”

For more information contact your MCUL league representative or CUSG Lending & Insurance Consultant Alan Babcock at (800) 262-6285.