Licking The ENVELOPE
"Empty-envelope" ATM fraud will soon be a thing of the past for Wright-Patt Credit Union.
A new image-based ATM platform and alert system, Omega ATM and Alert Manager provided by TWS Systems, Inc. and set for installation by the end of the year, will notify the $950-million CU of possible fraudulent deposits, according to Cynthia Schroeder, director of information and technology. The St. Petersburg, Fla.-based TWS provides transaction processing and fraud prevention solutions.
"We'll know at time of the ATM deposit if we have been given an empty envelope and we can block the deposit right away," she said. "The Omega ATM and Alert Manager should greatly minimize loss on the ATM side."
That's a big deal-more than 15% of Wright-Patt's losses are due to fraudulent ATM transactions, said Schroeder. About 80% of all empty envelopes are deposited by new members, she added.
Wright-Patt processes about 828,000 ATM and debit card transactions per month, 48% of which are ATM transactions, said Schroeder.
The credit union has about 110,000 ATM-debit cards in use. "We're putting on approximately 1,200 cards per month, so we anticipate our numbers to continue to grow rapidly," she said.
Alert Manager will allow Wright-Patt CU to set its own fraud prevention criteria. WPCU will receive notification of deposits over a predetermined maximum, deposits from new members, or deposits from an account with excess NSFs. "After receiving an alert, we can go into an account and block it if we have concerns," Schroeder explained.
In addition, the system connects to Primary Payment Systems (PPS), providing fraud prevention services, for access to the National Shared Databases, which contain current information on potential check returns from more than 200 million draftable accounts nationwide.
The Omega ATM platform and Alert Manager system are new to Pentagon FCU of Alexandria, Va. and Orange County Teachers' FCU of Santa Ana, Calif. as well.
Since 2002, Wright-Patt CU has already experienced fewer ATM losses by accelerating item processing at its 16 branches. Each item is passed through a TWS image capture device-at up to 30 items per minute-and is then immediately available to central processing.
With same-day processing, the CU quickly spots empty envelopes, Schroeder explained. "We can block the account the first time it happens and on the same day and stop any further losses."
In a recent month, Wright-Patt received about two empty envelopes per day, representing an average of about $265 in loss, Schroeder said.
Though the credit union doesn't have access to records of the number of empty envelopes it received before it accelerated its item processing with TWS, employees recall the credit union receiving at least double the number of empty envelopes.
Previously, "everything was manual," Schroeder said. Five employees at central processing worked on a two- to three-day lag to complete one day's ATM deposits. "If there were empty envelopes, we weren't able to prevent more in a timely fashion."
Now, one or two employees can complete processing and balance the CU's 35 ATMS in the same day, she added.
Though ATM fraud looks as if it may be tamed at Wright-Patt CU, debit cards and check deposits are still a "nightmare," Schroeder said. "Check fraud is growing at an unbelievable rate and really causing us problems with the amount of time needed for investigations," she said.
She hopes that the connection to PPS will limit debit and check fraud as well. "Combating fraud is a top priority for Wright-Patt CU."
That said, the credit union is doing more than employing fraud-fighting technology at its ATMs and teller windows. "We're bringing in experts to train our employees in real life scenarios," Shroeder said. "We want to get everyone to start watching closer and knowing what to look for. Also, our employees will begin taking tests on fraud."