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Credit Card Applications » News » Other » Location Technology Tracks Credit Card Fraud

Location Technology Tracks Credit Card Fraud

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Location Technology Tracks Credit Card Fraud
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November
11

If your credit card is used to make a purchase or get cash from an ATM in Madrid while your mobile phone is at home in Minnesota, you could be the victim of credit card fraud. On the other hand, if you are visiting Spain, you won’t be happy when your credit card gets frozen in a mistaken attempt to protect you from fraudulent charges. But new technology available to banks and credit card issuers could nip this confusion in the bud and help them improve fraud detection.

A service that uses proximity correlation to track the location of a customer’s mobile phone in relation to where their credit card is being used could make fraud detection more accurate and help prevent false fraud reports. Anyone who has had their credit card frozen while on vacation knows the conflicting feelings of irritation and reassurance that result: being glad that the credit card issuer is on the lookout for fraud, but annoyed that the card is frozen.

Proximity Location Service stops false fraud reports

FICO is introducing Proximity Location Service as part of its Fraud Resolution Manager program after trials of the product showed a marked reduction in false fraud reports. In United Kingdom trials, there were up to 70% fewer false reports when banks used proximity technology as part of their fraud prevention program.

“Banks are trying to perfect a tricky balancing act – protect customers without causing undue frustration for cardholders who travel or who use their cards in new locations,” said Gabriel Hopkins, a senior director at FICO.

The Fraud Resolution Manager is a communications service that banks can use to protect their customers from criminal activity. FICO Proximity Location Service now comes bundled with the service and compares the location of the customer’s phone to the location where their credit card or debit card is being used. Cardholders must register their mobile device with a card issuer that uses FICO Fraud Resolution Manager to take advantage of this new technology.

If it’s found that a card is being used overseas while the customer’s registered phone is at home, the card will be automatically blocked from further use until the cardholder is notified and can verify the activity. When the cardholder confirms the activity is legitimate, the card can be unfrozen.

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