Ent CU's Keys For Retaining 'Low-Risk' Rating

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COLORADO SPRINGS, Colo. — Despite a rise in the number of fraud attempts in the last three years, $3-billion Ent Federal Credit Union is rated a low-risk issuer by Visa.

Marilynn Davis, Ent's director of card services, said the rating is the result of tireless work and a number of procedures Ent has deployed. She noted Ent FCU uses data mining tools from CO-OP as a resource to extract a point of compromise and is able to actively identify specific, breached cardholders. In addition, Ent uses a neural network that is coordinated with CO-OP's network, which allows CO-OP to contact Ent cardholders to verify a suspicious transaction.

"We have enabled real-time scoring, which has been very successful for us," Davis said. "It can identify fraud at the point of authorization, which is a very good addition to our neural network."

In addition to the support it receives from CO-OP, Ent has an internal program that uses a supplemental data mining tool. Davis said this tool can identify known fraud situations based on what the CU has encountered in the past, which allows it to build filters to extract data.

"We take cardholder activity from the day and if any of that activity fits into the program, we can extract a report with that information on it," she explained. "This creates a profile of possible fraud which we can act upon."

Small Stuff, Big Threat

In cases where a criminal uses the common practice of testing a breached card with small charges first, the credit union contacts the member and also probes to see if the member recalls responding to any type of phishing attempt, and whether members are actively monitoring their account online. If the charge remains suspicious, Davis said the CU does not take any chances-it closes the card and issues the member a new one.

"In that same hierarchy of procedures we follow, we are a big issuer of Visa cards, so we watch Visa's fraud alerts every day," she said. "Falcon at CO-OP is 99% of our card protection, but we are working on fraud prevention Monday-Friday, 8 to 5. We are looking at fraud alerts, researching them, contacting cardholders. If the transaction has posted to their account we get the money back to the member as quickly as possible. We have daily reports that we monitor for high-risk, suspicious activity. We make outbound calls to our cardholders and make appropriate notes on any confirmed card.

Davis said Pat White, Ent's card products manager, is active in several different fraud groups, including fraud alerts at Fair Isaac. When one institution recognizes a new fraud situation, Davis said Ent examines its files to determine if it has a similar situation.

"Compared to our peers, I believe we are doing very well," Davis declared. "Fraud is on the rise, especially in the last three years, but we have a very good handle on it. We catch a good amount of it before situations happen, or before it goes too far. Our risk score from Visa is low compared to the industry. Our goal is to keep members confident, to keep their deposits with us, by knowing we back them up and they can use their cards without fear."

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