Enticed by the ease and convenience of eCommerce, consumers have been moving their purchase activity online for years. This trend has only accelerated during the COVID-19 pandemic, as workplace closures and stay at home orders have dramatically reduced in-person POS transaction activity for all but the most essential businesses.
As online shopping volume increases, incidents of card not present (CNP) fraud are also rising. In recent years, merchants, issuers and processors have implemented rigorous measures to limit card present scams like fallback transactions, incenting fraudsters to target eCommerce sites as an easier point of entry:
“The fraudsters are being bolder in their attempts, and attempting large dollar transactions as well as high volumes of low dollar spend,” says Ashley Town, Director of Fraud Services, CO-OP Financial Services.
Credit unions must address this rising tide of fraud head-on, while also supporting their members’ online shopping needs, conveniently and safely. Here are three ways your credit union can help your members protect themselves:
According to Town, “Your members are the best, first line of defense when it comes to these transactions because they’re the ones that know what types of transactions they’re going to be doing.”
Now is the time to deputize your cardholders as members of your fraud team, by sharing a steady stream of educational content. Provide your members with guidance on how to protect their online identity, timely tips for safe online shopping practices like regularly changing passwords on their favorite eCommerce sites, and frequent updates on the latest scams and fraud alerts.
Card controls and alerts are powerful tools for preventing and catching fraudulent card activity. They empower your members in the fight against fraud by letting them decide when, where and how their cards are used – in advance and in real time.
For example, if your member isn’t planning any travel in the near term, they can modify their controls to prevent international transactions or activity occurring outside a defined radius of where their smartphone is located.
Members can also set real-time text and email notifications to alert them to unusual activity and high-value transactions.
“Members that use solutions such as CardNav by CO-OP Card Controls and Alerts can be proactive in identifying and proactively blocking fraudulent behaviors” Town says.
Your credit union plays a crucial and active role in fraud prevention as well. Especially now, with both online commerce and CNP fraud on the rise, it’s important to monitor emerging fraud trends and take action quickly.
Best practices include paying attention to shifts in both transaction timing and velocity across merchant and industry sectors. Higher-value transactions represent greater risk. If you observe a high volume of large transactions from the same BIN (bank identification number), it may mean that batch of cards has been compromised[i].
“We’ve seen an uptick in BIN attacks because right now it seems to be an easy path for fraudsters,” Town says. “They don’t have to leave their home — and can use automated technologies to push transactions quickly.”
Help your members help themselves
Your members are your frontline defense in combatting the rising tide of CNP fraud – but they need access to the best tools to be effective. Armed with the latest data and backed by your credit union’s sophisticated and diligent fraud monitoring program, together you’ll be able to stop invisible online criminals in their tracks.
It’s a challenging time for everyone, and fraudsters are taking advantage of the most vulnerable members of society. But even after the current pandemic crisis recedes in the rear-view mirror, card fraud will be here to stay.
Reach out to us to learn about CO-OP’s industry-leading Fraud Prevention and Management Solutions, including CardNav by CO-OP and fraud text alerts to empower your members in the fight against fraud.
[i] “Coronavirus Fraud Scam Predictions & How To Combat Them,” Feedzai.com, April 2, 2020. https://feedzai.com/blog/coronavirus-fraud-scam-predictions-how-to-combat-them/