DES MOINES, Iowa (3/5/14)--Although fraud detection strategies are becoming sophisticated, consumers remain the best line of defense in fraud detection and prevention, according to a new white paper from The Members Group.
Even the most high-tech and human-analysis systems are improved when cardholders are actively engaged in the monitoring and detection of red flags on their accounts, according to the paper, "Empowering Cardholders to Help Prevent Card Fraud." Much of this is because today's consumer fraud tools rely on triggers set by the cardholders themselves. Although fraud detection strategies are becoming extremely granular with every new version of fraud-prevention software, a consumer remains the best at predicting his or her own purchase behavior.
Consumers are, therefore, most equipped to understand which types of transactions qualify as unusual for their accounts.
Educating consumers on fraud trends and tips for protecting themselves is one way credit unions can leverage the consumer's vantage point. Helping cardholders spot trouble before it affects them is incredibly valuable, not only for the individual, but also for the credit union.
The abundance of communication vehicles available to financial institutions today makes it easier to share a large amount of information quickly and broadly. When researching content for blogs, social channels, newsletters, emails, statement stuffers and more, consider fraud-focused tips and advice, the paper advised.
Putting fraud-prevention tools in the hands of consumers is another way financial institutions can empower cardholders. Fraud text alerts are among those tools assisting consumers and financial institutions in the identification of fraud and in the reduction of the unnecessary inconvenience generated by false positives.
Triggered by a financial institution's own unique fraud prevention strategies, fraud text alerts are customized to an individual credit union or community bank's existing program. If a particular transaction is flagged as risky, human-fraud analysts take a look at the transaction in the context of the account and the existing strategies, and if warranted, verify the transaction by texting the cardholder.
To read the entire white paper, use the link.