Fraud
FRAUD
UPDATE


   As fraudsters continue to become more aggressive and creative, so do the card companies’ efforts to battle losses from phishing, hackers and other fraud attempts.
   One of the latest attempts has the card companies, bitter rivals in most instances, banding together to issue advice to card users about how to protect their credit card accounts, as well as their identities, from thieves.
   In mid-October, a group known as Your Credit Card Companies issued an advisory with several fraud prevention tips. Your Credit Card Companies includes Capital One, Chase Manhattan Bank USA, N.A., Citigroup, Discover Card, MasterCard International and MBNA.
   In the advisory, the group warns card users and merchants about phishing, written about several times by Transaction World. The card companies recommend that card users be aware that that requests for personal information such as a user ID, account number or password are usually fake. Consumers should not respond to them, but rather delete the email. The card companies also advise consumers:
   When communicating with credit card issuers electronically, always use the issuer’s secure online Web site.
   Be sure to have the latest anti-virus, spyware and security updates on your computer as a safety measure.
   Create passwords that are easy to remember, but difficult for “outsiders” to guess. Mix letters and numbers, avoid using birthdays and Social Security numbers. Use a different password for financial-services Web sites and transactions than for other accounts. Change passwords regularly.
   Deal only with companies that post their privacy policies on their Web site. Reputable companies should prominently display their policies before asking for credit card or other personal information.
   If consumers think they have been a victim of either identity theft or credit card fraud, the card companies advise them to contact their financial institutions and the three major credit bureaus, law enforcement and the Federal Trade Commission.
   One of the key factors for card companies in fighting fraud is good, quickly accessed data. Two card issuers cited those factors recently as they discussed their selection of the NCR Teradata data warehouse.
   “Information is the tool to take the right transactions to review,” Vanina Bertello, data warehouse project leader for Visa, Agentina, S.A. told attendees at the recent Teradata Partners conference. With a good data warehouse, the card company was able to determine which elements of transactions could be reviewed quickly, so that a purchase could be accepted or rejected without any noticeable lag in the process.
   The data warehouse and statistical techniques help Visa Argentina test and select rules (i.e., card x belongs to person y) for fraud monitoring at the point- of-authorization. Statistical modeling helps Visa Argentina select the appropriate rules that help prevent fraud without unnecessarily delaying transactions, Bertello says.
   While certain factors like spending limits, name and authorization check can be done immediately, other factors, like atypical individual spending patterns and fraud ring patterns, are studied offline. The data warehouse enables Visa Argentina to research the more complex patterns offline within 30 minutes, according to Bertello.
   The warehouse information and statistical modeling enable Visa Argentina to quickly adjust rules and procedures to help protect against new types or certain patterns of fraud. As a result of the hardware, software and statistical techniques, Visa Argentina has gone from having one of the highest fraud rates to the lowest fraud rate in the Latin American Region.
   Discover, a business unit of Morgan Stanley, has awarded a contract for Teradata to deliver a multi-terabyte computer system to fill the company’s reporting and analysis needs.
   Teradata also will supply hardware, software and consulting services to convert Discover’s existing data warehouse to Teradata-based technology.
   “We have 50 million card members. Preventing fraud is a high priority with any type of information management system that we use,” said Discover spokesperson Jennifer Kang, adding that there were several other factors in the company choosing the Teradata data warehouse.