Fair, Isaac & Co. has developed a fraud detection system that promises to help card issuing banks get more specific information about potential problem transactions.
The San Rafael, Calif, company's Fraud Intercept program, currently under installation in a few unnamed banks, provides an "in-stream" review of transactions while they are taking place, as well postauthorization account review.
The system has four components that can function separately or together.
Scoring and Tracking
Two fraud detection score-cards, which can be used alone or in tandem, review transactions in-stream and after the authorization. On-line Fraud Authorization Control provides instream scoring and tracking. Fraud Review software reviews all previous transactions, comparing them with account patterns and controlling decisions on queuing the account for calls, letters, and blocking.
Fraud ScoreWare sets up and maintains a file for each account, based on usage patterns.
The fraud intercept program has been under development for 18 months and started being installed in pilot programs about three months ago, according to John Perlis, Fair Isaac's senior. account management vice president and head of the program.
He said the greatest benefits of the system are its ability to adapt its controls and to be integrated into a host credit system.
"It's a question of segmenting the population by a number of items - open to buy, credit limit utilization, merchant type, region code, customer service data, nonreceipt problems in region - all of which goes into profiling how a certain transaction is handled," Mr. Perlis said.
He added that 0.2% of all transactions end in some type of action being taken. Fraud Intercept should be "up and running" and available to more banks by the second quarter of 1994.