Credit Card Fraud On The Rise
According to annual Card Issuers’ Safety Scorecard Report released by Javelin Strategy and Research Organization, fraud prevention practices continue to decline, while fraud detection initiatives significantly increase.
Javelin conducts an independent, third-party analysis of the top 23 US credit card issuers that examines consumer-facing security features related to fraud prevention and detection. So far for 2012, credit card issuers are meeting 44% of the fraud prevention criteria, down from 54% in 2011. However, with the continued decrease in meeting prevention standards, issuers are increasing efforts to implement fraud detection tools to flag fraudulent activities as early as possible.
The report states, “The decline in prevention activities correlates with Javelin’s recent consumer research showing that credit card identity fraud increased by 87% in 2011, resulting in total losses of $6 billion”.
With this, credit card issuers are challenged to find cost-effective, preventative solutions along with an array of detection features, such as a wider range of customer alerts on account changes and activities, to mitigate against fraud and identity theft.
One of the most common means of account takeover is when a consumer’s physical address and/or primary telephone number changes. However, Javelin reports that only 17% of card issuers offer personal information change alerts.
The cost of fraud is high. Both issuers and consumers will achieve the greatest return on investment by creating an environment where it is easy to identify scams and potential threats with a variety of prevention and detection services that can be catered to each customer’s individual security needs.