"Card issuers have a golden opportunity to
increase loyalty and retention, and strengthen relationships and their
brand reputation, by giving consumers simple identity fraud prevention
tools they like to use," said James Van Dyke, President of Javelin
Strategy and Research. "Identity fraud is a major pain point for
consumers and can damage the relationship between the consumer and the
card issuer."
Why is it important to address identity fraud today? Look at the numbers.
Last year, 8.4 million Americans became victims of identity fraud,
with total fraud amounting to $50 billion. The average victim paid $587
out-of-pocket for fraud on an existing account. If the thief opened a
new account in the victim's name, the average victim paid $792. On
average, victims spent 25 hours resolving their fraud case.
Dream credit card - security elements for protection against identity fraud
Javelin's research has determined the optimal combination of
available, effective tools and policies that best protect consumers.
Below are the ideal security elements of a dream credit card and
research findings in support of them:
For Fraud Prevention
- Provides customers the ability to restrict or allow certain
types of transactions (e.g. cash advances, foreign transactions,
card-not-present transactions).
- Uses identifiers other than social security numbers for identity verification.
- Truncates all customer-sensitive data while interacting with customers.
- Encourages customers to protect their home computers with
anti-virus software by partnering with security software vendors (e.g.
Bank of America's partnership with Symantec).
- Offers photo of account holder on card.
For Fraud Detection
- Provides mobile device or email alerts of high-risk changes
to accounts (e.g. replacement card sent out, PIN or password reset,
change of physical address or email address), initiation of higher-risk
transactions (e.g. card not present, foreign transactions, activity on
dormant account), and status of accounts (payment past due). Over
two-thirds of account takeover cases are due to a fraudulent change of
address. Alerts for changes to personal information are one of the top
desired alerts by consumers.
- Notifies customers of new account set-ups. New accounts fraud
is traditionally the most difficult for consumers to detect. Credit
cards continue to be the most abused category of fraudulent new
accounts.
- Facilitates consumer ordering of credit reports and credit
monitoring services. New fraudulent accounts can be virtually invisible
to a consumer without a credit monitoring service.
For Fraud Resolution
- Institutes a comprehensive, up-to-date data breach resolution plan.
- Provides an identity fraud assistance team to help customers affected by fraud.
- Offers zero liability for fraud.
- Offers next-day card replacement in addition to 24/7 account suspension capabilities.
- Offers free identity fraud insurance.
