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More automated fraud alerts

By Marcie Geffner · Bankrate.com
Tuesday, June 14, 2011
Posted: 2 pm ET

Consumers who use credit cards may soon receive legitimate automated messages about suspicious-seeming activity, thanks -- if that's the right word --  to a new partnership between FICO and Adeptra.

Together, the two companies have introduced an automated fraud detection and verification service that's designed to flag and verify suspicious credit card transactions, and then contact customers automatically using voice, text and email.

"This capability expands the reach of fraud operations while reducing overhead costs, allowing operations to run smoothly without restrictions of staffing requirements or live-agent costs," the companies stated in a news release.

FICO, best known for the credit score of the same name, provides analytics and decision-making services to financial services companies.

Adeptra makes automated call center systems that contact consumers by voice, text and email and relay or leave prerecoded digital-voice messages about suspected fraud, payments and opt-in products and services. The company's systems can contact thousands of people simultaneously, make more successful contacts and produce "significantly better results than human agents alone," according to the news release.

A service that alerts consumers to fraudulent credit card activity sounds like a boon, because more alerts might mean quicker action to close a compromised account and stop further unauthorized charges.

Still, skeptics might be concerned about more automated systems that can send out thousands of alerts triggered by suspicious-seeming, yet potentially legitimate transactions. That's especially worrisome since these systems can be set up to place a block on a credit card until the consumer contacts the company and validates the activity. The alerts themselves may be mistaken by some customers for phishing emails or phone calls that warn of an urgent security matter.

Moreover, the main purpose apparently isn't to help consumers, but rather reduce the credit card issuers' costs of combating fraud by using automation to replace human agents.

Deborah Kerr, chief technology officer at FICO, said in a statement that it's difficult for credit card companies to grow and operate efficiently.

"The more they can focus the resources they have on generating revenue instead of preventing losses," she said, "the healthier their business will be."

Follow me on Twitter: @marciegeff

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3 Comments
Mack Easton
June 16, 2011 at 12:37 pm

BAD BAD BAD Bank Fraud Prevention tactics!!!!!!!!

In the past 7 weeks I have had my debit/check/Visa declined at very inconvenient times and locations. I pay most of my utilities by the check card "Visa" function. Not as credit card but direct payment from my checking account using Visa process. Some utilities do not immediately process the actual payment but do get approval for the payment at the time you make it. Then, if a hold has been placed after that, the actual charge may be declined or sent back by the bank!! This has cost me a 15.00 charge on two occasions for two different utility companies.

As for the "verification" process. I will not punch in or say my credit card number, pin number, SSAN, date of birth, code on the back or my card or give my bank account number on any device other than a "hard wired" telephone located, preferably, in my own residence. Banks repeatedly tell us to never share debit/credit card password with ANYONE! Yet on the verification phone call they ask for it. And, if I should respond to the "800 Service" number call, or voice mail, I have no genuine assurance it is really my bank. It's a computerized voice that can be copied and played to any person who might actually give it info, info that can be used for fraud.

I'm not giving out info to a computer, or even a live person until I start the conversation using a known valid number, usually from my bank statement.

If we all stop using the computerize verification process and insist on a live person, our right to do so, maybe the banks will get the message. If not, dump them.

Keep up the good work and vigilance Marcie!