Magazine article American Banker

MasterCard Enhances Fraud-Reporting System

Magazine article American Banker

MasterCard Enhances Fraud-Reporting System

Article excerpt

MasterCard International Inc. has introduced an enhancement to its fraud-reporting system that is supposed to reduce its members' annual losses by $12 million.

The enhancement, announced last week, is called System to Avoid Fraud Effectively, or SAFE.

It is part of MasterCard's membership protection program, which the New York-based association estimates will in total cut fraud losses by $50 million annually. Last year MasterCard members lost $452 million to fraud. SAFE increases MasterCard's capacity to assimilate data from its members more accurately, to spot trends, and to provide banks with fraud data about other banks.

Since credit card fraud is not a competitive issue, information about how an issuer handles its fraud problems is not proprietary.

Before SAFE, said Vincent DeLuca, MasterCard's vice president of fraud control, issuers did not have access to this shared information.

"Members want to know where they stand with their peers m terms of fraud," said Mr. DeLuca. This information, among other things, helps to determine how much money should be allocated to investigative resources, he added.

Increased Flexibility

MasterCard, which requires that its members submit a monthly report on their fraud activity, tracks nine types of fraudulent card transactions: lost, stolen, never received, fraudulent applications. counterfeit, mail and telephone order, multiple imprints, and "other" (used when an issuer does not know how the fraud occurred).

SAFE allows MasterCard to add up to 100 types of fraud to its list almost immediately. …

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