Keep Members Safe in Stores and Online

“We all know that Black Friday is the biggest shopping day of the year, which means card usage is much higher than usual,” said Amanda Atcheson, product marketing manager for CO-OP Financial Services. “Fraudsters see Black Friday as an easy opportunity to take advantage of a much larger pool of consumers. Not only do we routinely see Black Friday data hacks to steal card information from large retailers, but we also see fraudsters targeting individual cardholders with online scams and emails that turn out to be malware. This can be an even bigger problem if passwords are stolen and identity theft occurs.”

To combat card-related fraud, the U.S. payment industry has made significant strides in adopting EMV technology as the new security standard for credit and debit cards. Widely used globally, EMV chip cards are quickly making their way into the hands of U.S. consumers, and merchants are upgrading to new terminal platforms equipped with EMV card readers to facilitate the technology. Consumers can also expect broader support for near field communication (NFC) and tokenization technologies, which together enable and secure new contactless payment options such as Apple Pay and Android Pay.

“Security technologies such as EMV and tokenization can dramatically reduce exposure to card fraud,” Atcheson said. “EMV chips make it virtually impossible for fraudsters to create counterfeit cards. Tokenization used in Apple Pay and other digital wallets encrypts a consumer's card number so fraudsters cannot access it. Cardholders just need to know about the benefits of these advanced technologies – and they need to use them when checking out.”

That is where credit unions can help, Atcheson said, first by making advanced fraud-prevention tools available to members, and then by educating them on how to install and use them.

“Credit unions should also encourage consumers to take security into their own hands by monitoring their transactions and reporting any suspected fraud immediately,” she said. “In addition to the security embedded in today's payment platforms, consumers can take advantage of new smartphone apps with card controls and alerts that allow them to set up controls for card usage, receive real-time alerts when unapproved transactions occur, and even temporarily disable their own cards if needed.”

Using Data Analytics to Fight Fraud

Behind the scenes, Atcheson advised credit unions to also closely monitor member transactions using preventative analytics tools. “Data analytics can be extremely effective at identifying anomalies in a member's card usage and uncovering potential points of compromise,” she said. “Having analytics in place now can make a big difference in securing member accounts and avoiding service disruption during the holidays. Plus, these tools pay for themselves quickly by minimizing credit union losses due to fraud.”

She continued, “As FinTech continues to redefine how payments are made, and new players such as Snapchat, Facebook and Venmo continue to enter the P2P payments market, consumers need to be even more vigilant in protecting their account information. For example, they should know that it is much safer to use a person-to-person payment solution offered through their credit union than to submit payments through social media sites or other venues of questionable origin. This kind of education is important, and as a credit union you will only enhance your member relationships by providing it. As a trusted partner, you can help members safely shop throughout the holidays with the technologies they need to play defense against fraudsters and win.”

Learn more about the migration to EMV now in progress in CO-OP's EMV Common AID white paper.