Only time will tell how or whether the new USPS standards will impact account takeover rates.
In a recent article for Great Lakes Banker, Adam Elliott, Founder and President of Kevari writes, “As you’re assessing opportunities to embrace modern technology and
When the Federal Trade Commission made a public request for comment regarding the 2007 Red Flags Rule, the American Bankers Association and Attorneys General from
How do you distinguish legitimate address changes from fraudulent ones without causing undue customer friction? What you DON’T do: Rely on change notification letters. The practice of sending change notification letters to comply with Section 114b of the FACT Act Red Flags Rule does almost nothing to proactively prevent fraud. What you SHOULD do: Identify and pursue only the most suspicious address changes. While you’re at it, monitor all email and phone changes, too.
While much of regulatory compliance is now achieved with the help of efficient automated systems, financial institutions still have processes that have not benefited from modern technology. These relics from the past are a drag on the bottom line; they are paper-intensive, inefficient, and expensive.
One such relic is the process by which financial institutions are verifying customer/member address changes to comply with The FACT Act Section 114B. Instead of using cost-effective analytics software solutions as the law allows, institutions are printing and mailing letters at a cost of about $1 per address change.
A digital approach to verifying address, phone number, and email changes is more efficient, cost effective, and better at reducing fraud losses in today’s digital banking environment. There’s never been a more perfect time for financial institutions to retire those antiquated address-change letters.
As financial institutions face new and more complex fraud schemes in both account takeover and new-account fraud, there is an acute need for fraud prevention