PSCU Combats Loyalty Redemption Fraud
CURewards® Secures Cardholders’ Loyalty Rewards Redemptions through Advanced Authentication
St. Petersburg, Fla. (January 19, 2017) – PSCU has announced deployment of additional technology to minimize loyalty rewards redemption fraud for all CURewards® credit unions. A fast-growing trend globally, loyalty fraud is an easy way for fraudsters to launder money by stealing and then reselling rewards points or goods. Using an advanced authentication process that validates all entities in the redemption loop – the device, the member and the redemption transaction – the new fraud prevention tool operates on a comprehensive set of rules for detecting and preventing such fraudulent transactions, without relying on information provided by the member.
“We jumped at the opportunity to pilot test the new tool, as some of our members had recently experienced fraudulent rewards redemptions,” said Liz Fee, Vice President of Payments and Deposits at Citadel Federal Credit Union in Exton, Pa. “This is a new criminal angle our members are not sensitized to, so we found they appreciated knowing that we were monitoring redemption activity for them and holding all suspicious redemptions for confirmation of legitimacy before allowing them to be fulfilled.”
The tool’s unique, risk-score identification process and digital risk engine were instrumental in reducing loyalty fraud in 11 attempts (1.2 million in points value) during the PSCU pilot phase of implementation. In bringing this added benefit to CURewards credit unions at no extra charge, PSCU is reinforcing its commitment to protecting Owner credit unions from fraud risk.
“Having PSCU’s 24/7 Risk Management team monitor and connect with our member regarding suspicious redemption requests proved to be timely, as PSCU serves cardholders during the hours most credit unions are closed,” said Fee. “At the CUSO level, PSCU can spot trends, which can lead to preventing potential redemption fraud at other PSCU Owner credit unions that use CURewards to build loyalty.”
Over 330 credit unions, representing 3.5 million cardholders, utilize PSCU’s CURewards to boost member loyalty. When implemented with the CURewards loyalty platform, the tool provides one of the most sophisticated workbenches for analysis and fraud detection on the market. Unlike other tools that focus on the device, the member or the transaction, this tool detects suspicious activity through digital risk-engine rules, blocking and eliminating blacklisted devices, inconsistent location indicators, form-filling behavior, and multiple redemptions from different identities on a single device.
“In keeping with our commitment to protect credit union members at every transaction, it is important that we plug every opportunity the fraudsters seek out,” said Annie Cox, Vice President of Loyalty Solutions at PSCU. ”Loyalty fraud costs more than redemption points, and it carries a potential negative impact to the credit union’s reputation and brand along with it. Those are both things we are dedicated to preventing.”
Established in 1977, PSCU (St. Petersburg, Fla.) is the nation's leading credit union service organization (CUSO). The company was recognized as CUSO of the Year in 2016 by the National Association of Credit Union Service Organizations. PSCU’s products, financial services solutions and service model collectively support over 850 Owner credit unions representing more than 20 million credit, debit, prepaid, online bill payment and mobile accounts; protect over 2 billion transactions annually from fraud; and optimize credit union performance and growth. Comprehensive 24/7/365 member support is delivered through call centers located throughout the United States. For more information, visit www.pscu.com.