Fraudsters’ wide repertoires of tricks, traps and scams mean financial institutions (FIs) must be diligent with their fraud prevention efforts to stay ahead. In 2016 alone, more than 15.4 million consumers fell victim to fraudsters – up 16 percent from the previous year. With fraud scoring tools, FIs have one more technology in their pocket to combat this growing fraud trend.
Through predictive and behavior-based decisioning, fraud scoring tools help determine the likelihood transactions are fraudulent. Fraud scores are ranked on a scale from zero to 999, with zero indicating the least risky transaction. For FIs partnering with TMG, these scores take one of the following forms:
- Real-Time – Transactions receive a score as they go through the authorization system. This score is used for decisioning and queuing purposes.
- Quasi – Transactions receive a score immediately after they go through the authorization system. This score is used for queuing purposes only.
- Batch – Transactions receive a score during nightly cycle processing. This score is used to decision subsequent transactions.
With fraud scoring tools available through TMG, FIs have the power to set their own criteria for what constitutes a “risky transaction.” Each FI chooses the decisioning elements pulled into their fraud scores. Those elements include: dollar amounts, merchant category codes, zip distances, 24-hour velocity, fraud behavior IDs and more.
To take their fraud protection to the next level, FIs can also utilize tools, like Fraud Predictor Plus, which take merchant profile data into account when determining fraud scores. Such tools adjust fraud scores based on the identification of merchants that are more or less likely to experience fraud.
Regardless of which fraud scoring tool they use, FIs choosing to adopt this technology are likely to experience fewer chargebacks, lower net fraud losses and reduced operational costs. This is good news for consumers who, in turn, may reap the rewards of improved service – not to mention less inconvenience from fraud.
