In the fight against fraud, community financial institutions (FIs) are tasked with finding a balance between stopping card fraud and allowing valid cardholder activity. Although cardholders want their FIs to have fraud prevention strategies in place, they do not want to be inconvenienced by unwarranted declines. More affluent cardholders, in particular, tend to be sensitive to those types of declines.
For fraudsters, affluent cardholders present a unique profit opportunity. In fact, there has been a recent spike in thieves focusing their attention on cardholders likely to have higher credit limits. By replicating the transactions these affluent cardholders make, fraudsters can often go largely undetected and live a life of luxury — on the real cardholder’s dime.
Fraudsters have discovered they can target high-dollar credit limits by tracking cards tied to data breaches. For example, cardholders who fell victim to recent breaches at luxury hotels are prime targets for fraudsters. This is because the crooks can infer the cardholders have high enough credit limits to afford high-end hotels. Furthermore, these cardholders are likely to have VIP statuses on their cards, which allow for high-dollar transactions.
To help combat fraudsters after big ticket items, FIs should:
- Warn VIP cardholders of the potential danger and encourage them to closely monitor their card statements
- Evaluate each cardholder in a permanent VIP or travel strategy on a regular basis
- Frequently review limits within those VIP and travel strategies
- Place travel memos on accounts where cardholders have called to alert the FI they are traveling
