Magazine article American Banker

AMEX Monetizes Fraud Alerts with New Service

Magazine article American Banker

AMEX Monetizes Fraud Alerts with New Service

Article excerpt

Byline: Kate Fitzgerald

Responding to consumers' growing concerns about online fraud and identity theft, American Express Co. unveiled a premium-level fraud-monitoring service.

For $15.99 per month, cardholders who participate in Amex's ID Protect Premium service will receive more elaborate monitoring of the Internet to detect unauthorized use of their personal information, such as Social Security numbers, names and addresses, and up to $1 million in insurance benefits to cover potential losses from identity theft.

By adding the service alongside its existing $9.99-a-month Single Identity fraud protection, which the company has renamed ID Protect, Amex is "looking to monetize various levels of identity-theft protection as more consumers indicate they are worried about it," said Phil Blank, senior security risk and fraud analyst for Javelin Strategy and Research.

Amex already offered an "outstanding" array of instant notificationsof suspicious account activity at no cost to cardholders, Blank said. But Javelin research found that roughly one in four consumers is willing to pay for extra identity-theft services from a credit card company. Among those, 29% subscribe to more than one service and 8% subscribe to more than two such services, Blank said.

As a result, Amex's move, which it announced Wednesday, may reap solid returns, and other credit card marketers likely will follow with their own beefed-up, higher-priced fraud-protection services.

"It appears that there is a pretty big market out there to be tapped among consumers who have higher concerns about identity theft, and they are willing to pay extra to get more layers of protection," Blank said. "We're going to see more of these premium-level services cropping up from credit card marketers."

Amex's premium-level service provides customers with 24-hour monitoring of black-market websites, public records and online directories to detect unauthorized use of personal data, with "prompt alerts" of such activity. …

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