SAN DIEGO - AT&T Universal Card Services has signed a long-term agreement to use a fraud-detection system based on a neural network.

The fast-growing credit card issuer has committed to a multi-year contract with San Diego-based HNC Inc., the country's largest neural-network producer.

Terms of the contract, including its length, were not disclosed.

HNC's Falcon fraud-detection system, already employed by many of the nation's largest issuers, uses neural-network algorithms - which function much like human brain cells - and advanced statistical techniques to determine the probability of fraud.

Second Model Used

"Implementing the neural network-based Falcon system is part of AT&T's commitment to applying the most advanced technologies to our day-to-day business operation," said Kevin Keleghan, AT&T's senior vice president of credit policy.

In addition to comparing transactions to the general fraud information and patterns garnered from all of its customers, HNC's Falcon system uses a second model for each authorization, based on the individual cardholder's habits.

Having AT&T as a customer will help to enhance the Falcon system's accuracy by adding data from the Universal card to HNC's.

"We're pleased to have a long-term business relationship with a company of AT&T's stature and success," said Michael A. Thiemann, HNC's executive vice president.

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