Five best practices for fighting fraud

Fraud trends are ever-growing and ever-changing. Just when we have a handle on a current trend, a new one emerges. It’s important to be as vigilant as possible in identifying new trends, while at the same time not impacting your cardholders’ valid purchases.

Implement these best practices at your financial institution to help identify fraud incidents and reduce losses.

Implement a fraud detection service. Secure a 24/7 service that reviews all transaction activity and either declines suspicious transactions, creates cases or both. Educate your cardholders to use their PIN whenever possible to reduce red flags on valid purchases.

Encourage cardholders to set alerts through mobile channels. Cardholders can use mobile banking applications to set alerts for specific transaction activity. If they receive an alert for a transaction they didn’t make, they can immediately restrict their card.

Provide a 24/7 phone number to report fraud or lost/stolen cards. Giving cardholders a 24/7 phone number to report a card that’s lost or stolen or if they’ve identified fraud is important. Suspected fraud can be reported immediately, and the card can be turned off.

Join — or start — a local fraud group. As a member of a local fraud group, you can network with local merchants, law enforcement and other financial institutions to learn of others’ experiences, share tips and hear about possible scams. If your community doesn’t have a local fraud group, start one.

Keep daily limits low, but manageable. Having extremely high daily limits puts you at risk for large losses. Most cardholders, even if they use their card every day, do not spend hundreds or thousands of dollars on a daily basis, but the fraudsters will! Keep limits low, but manageable for cardholders.

With more and more payment options, the potential for fraud increases. By educating your cardholders and staff, together we can stay ahead of fraud and lower your risk.


Liz Little is a fraud consultant with Shazam. You can reach her at [email protected]