Fighting Fraud

Credit card companies enlist card carriers' help

With an estimated $1.8 billion lost to fraud last year, credit card companies are desperate to decrease the number of fraudulent transactions that are processed each year. They're so desperate in fact, that a recent Gartner Group report insinuated that card-issuing companies spend more time worrying about their own liabilities than those of the end customers, the credit card holders.

Two-way interactive alerting promises to change the landscape of credit card fraud, according to Vytas Kisielius, president of Adeptra Inc. Adeptra has developed what it calls a just-in-time response solution that allows credit card companies to reach out to card holders and verify whether a certain transaction or series of transactions is valid. Once the verification process is complete, the user is referred to a fraud specialist. Or, if the transaction is deemed legitimate, the information gained during verification is integrated into existing records for future reference.

The process is completely automated. Transactions are graded according to a set of rules outlined by the card issuer. If a transaction doesn't rate a certain grade, the two-way interactive system calls the card user and requests authentication by verifying at least two facts known only to the user. Kisielius says that of the transactions that are flagged for verification, about 80 to 90 percent prove to be legitimate. However, it's the speed with which the verification process can be completed that makes this managed service appealing to credit card companies.

Kisielius says that six of the top 10 credit card issuing companies are using Adeptra's two-way interactive program as a means of getting control of fraudulent transactions. "What we've shown is that we can make customer contacts for roughly one-half of the current cost," says Kisielius. His hope then, is that companies will redirect their fraud-prevention budgets to put call-center personnel to work doing the more "human" tasks that call-center directors wish they could do.

In the future, Kisielius says that Adeptra will begin applying its technology to other costly areas, such as collections and marketing, and in industries outside the credit card industry.

— Jerri L. Ledford

Jerri L. Ledford [jledford6568@comcast.net] is a freelance business and technology writer.

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