Card Fraud: A Collaborative Fight

  Card fraud sure is getting a lot of attention these days, as well it should. Unfortunately, for all the attention the key industry players are giving fraud, fraudsters increasingly are getting more sophisticated in their schemes.
  And bank debit and credit cards are not their only targets. While this month's Cover Story on page 24 addresses how financial institutions are working more closely with competitors and other industry players to collectively combat fraud, the Debit Card Report article on page 14 notes how proprietary, closed-loop merchant gift cards are gaining fraudsters' attention as well.
  The bottom line is, where criminals can sense the potential for scamming the system to gain access to cash, they'll take full advantage of the opportunity.
  As Bob Skiba, general manager and executive vice president of Stored Value Systems, notes in the Debit Card Report story, the key to combating fraud is to try to stay one step ahead of the criminals. And merchants have taken steps to do so by removing cards from display cases, changing the way magnetic stripes are positioned on cards and making cash registers more secure, among other things.
  On the bank card front, increased cooperation is having some positive effect, though improvement is needed in the help the industry is receiving from federal law enforcement, some experts contend. Among them is Ted Crooks, vice president of the Global Fraud Solutions Group at Fair Isaac Corp., who says FBI assistance thus far has been "mostly lip service and very little shoe leather."
  Part of the problem is the Justice Department has failed to free up $250,000 in approved feasibility-study funding for the National Joint Theft Identity Center, which Crooks, the FBI and Los Alamos National Laboratory scientists proposed nearly two years ago. The center would, among other things, fight fraud by bundling small cases into big ones so the amount of money involved attracts the attention of local and federal law enforcement.
  The initiative may be gaining more attention, helped by President Bush signing an executive order on May 10 to strengthen federal efforts to protect against identity theft. The center plan also got a boost from the recent theft of a personal computer that contained data on 26.5 million military veterans. As a result, Crooks says he has received calls from Fair Isaac's lobbyist in Washington about reviving the proposal.
  Stay tuned.
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