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Sixth Annual Card Issuer’s Safety Scorecard: Red Flags Rule Shows Signs of Success as Criminals Shift Methods
Javelin Strategy & Research, May 2010, Pages: 50
The Javelin 2010 Card Issuer’s Identity Safety Scorecard analyzes the top 26 card issuers’ capabilities in protecting customers from identity fraud. This is the sixth consecutive year that Javelin has conducted this study, rating issuers on prevention, detection, and resolution TM criteria. The goal of
the scorecard is to measure existing issuer safety features, accurately reflect customer knowledge and expectations, and to make valuable recommendations to issuers to best safeguard their customer base and mitigate fraud losses. Javelin recognizes industry trends and educates issuers on how to maximize customer relationships and efforts in helping to most effectively fight fraud.
Primary Questions
- Which card issuers are best suited to safeguard their customers from identity fraud?
- Which card issuers excelled in prevention, detection, and resolution TM capabilities?
- In what areas are issuers succeeding and in what areas do they need to improve to better protect their customers’ safety?
- Where are issuers most vulnerable and how can they minimize fraud loss and increase customer satisfaction?
- What are the existing criminal trends, and how should issuers adapt their strategies to keep up with current fraud tactics?
- Where is the industry heading, and what are the security practices and trends of the future?
Methodology
Javelin tightened its criteria this year, raising the bar for card issuers to comprehensively and more proactively address customer safety. Issuers only received credit for a feature if they could assuredly confirm that they offered it. Five new features were added as well, all of which challenged issuers to offer new, cutting-edge customer safety capabilities. The prevention and detection categories were weighted more heavily than resolution due to greater inherent customer and issuer benefits and cost-saving opportunities. That being said, the scope of this report is limited to customer-facing security measures of card issuers and is reliant upon information supplied by customer service representatives (CSRs) and content found on issuers’ websites. This report does not intend to nor claims that it measures card issuer customer-facing security in its entirety, or back-end, behind-the-scenes security practices that issuers put into place. The survey was conducted from March 12, 2010 through April 9, 2010, with Javelin researchers evaluating and validating the offerings of the top 26 card issuers.
First, researchers thoroughly conducted research on card issuer sites. Javelin researchers searched and navigated throughout the issuer websites, finding as much documentable confirmation of available issuer offerings. URLs as well as the exact verbiage for features found online were recorded for each criterion offered by the issuer. A week of website research was conducted before proceeding to contact CSRs.
The mystery-shopper approach included researchers calling the numbers provided on the issuer websites, most notably credit card and customer service departments. Researchers were often transferred by call centers if additional information for a specific criterion was best suited to be answered by a different department within the card issuing company. The researcher explained that he/she was a potential cardholder and had concerns regarding the security of credit cards and identity fraud, and would like to speak with a seniorlevel CSR. If the researcher had reason to doubt the tenure or knowledge of a particular CSR, the call was immediately terminated and the process was begun anew.
Numerous calls were made and required to ensure accuracy of issuer information. The required number of calls on a per-issuer basis ranged from 4 to 8, with an average of 6.2 calls per issuer. More senior-level and knowledgeable CSRs were often more effectively able to answer the survey questions, requiring fewer calls to a particular issuer, although their responses were still verified by additional calls. The total number of CSR calls made per institution was recorded, along with each CSR’s name or employee number (for verification), date and time of the call, the department spoken with, and how long the CSR has worked for the issuer (when shared by the CSR).
Behind-the-Scenes Fraud Mitigation Efforts
This Javelin scorecard does not rate the many essential fraud-mitigation capabilities that issuers operate without the awareness of the customer. Back-end protection is designed to safeguard the effectiveness of the security mission while ensuring that the customer is not unduly inconvenienced. Both prudence (to prevent education of criminals) and a current lack of a viable method for structured assessment prevent Javelin from reliably scoring card issuers on the quality of their back-end fraud mitigation methods. Our research included in-depth interviews with a number of security professionals to understand the types of fraud mitigation capabilities that silently prevent, detect or resolve fraud without involving customers, often on a 24/7 basis.
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