CUNA Mutual Group, in order to stem rising losses on credit and debit card programs, is telling its credit union clients they must deploy stricter fraud-detection systems in order to keep their insurance coverage.
The insurer will require that CUs, either through card processors they hire or through their own card-processing systems, use acceptable fraud-detection software to continue insurance coverage. These fraud-detection systems are commonly referred to as neural networks.
They can detect suspicious transactions, based in part on past cardholder transaction characteristics, across banking and merchant payment channels. CUNA Mutual said all credit union insurance renewals starting Aug. 1 will require the use of fraud-detection systems.
