Holiday Vigilance


Take steps now to curb debit- and credit-card fraud during the holidays

By William Atkinson

The upcoming holiday shopping season is a busy time for everyone. For community banks that issue debit and credit cards, it’s a period to closely monitor their customers’ transaction activity to spot early potential card fraud.

Such vigilance over potential transaction fraud in debit- and credit-card portfolios is particularly important during the busy holiday shopping season, particularly around the biggest shopping days of Black Friday and Cyber Monday. That’s when both the number of transactions spikes and the spending habits of cardholders often shift, points out Tina Giorgio, president and CEO of ICBA Bancard, ICBA’s electronic payments service corporation for community banks.

“Around the holidays, it can be challenging to monitor and detect legitimate fraud, because customers’ spending habits change, such as in terms of where they shop and what they buy,” Giorgio says. “This can result in a lot of ‘false positive’ suspect transactions that the customers actually legitimately performed.”

This, in turn, can frustrate cardholders when their cards are temporarily blocked during security checks—right at the checkout counter.

To mitigate these false positives and frustrations, community banks should evaluate their debit- and credit-card security controls, which could be tightened or loosened at different times, Giorgio says. One option, she says, is for community banks to temporarily increase the dollar thresholds that trigger security checks.


Changing habits
According to Alan Nevels, ICBA Bancard’s senior vice president, card risk and merchant services, most community banks tend to be familiar with their card portfolios and customer spending habits. “In most portfolios, there are a top seven to 10 percent who are heavy spenders and transactors,” he says. “They should be monitored a bit differently than the remaining 90 percent of the portfolio, since this group tends to participate frequently in the e-commerce environment and travel internationally more frequently.”

Bottom Line:

Prevent holiday fraud year-round.

In all cases, Nevels says, community banks will want to monitor their internal reports for particularly abnormal spending patterns and irregular types of credit and debit transactions and account-change requests, such as address changes and new PIN requests.

For the holiday season, community banks can take several prevention steps, Nevels says. The first step should occur before the holiday—that is, promoting to their customers the availability and use of email, text and phone alerts to help quickly detect and protect against fraud. These communications channels enable cardholders to participate in defending themselves from card fraud and getting their reactivated card back in their hands faster. Banks also can reduce their losses when cardholders respond immediately to notices.

“We use neural networks systems to constantly monitor customer behavior, and these networks become ‘smarter’ as they see more customer behavior and are able to more quickly detect fraud,” Giorgio says.

“We use neural networks systems to constantly monitor customer behavior, and these networks become ‘smarter’ as they see more customer behavior and are able to more quickly detect fraud,” Giorgio says.

Back to school
Community banks also can start reviewing the various fraud resources at their disposal now, Giorgio and Nevels say. ICBA has developed an online data breach toolkit on its website as a free information resource for community banks. ICBA Bancard also offers a unique Fraud Loss Protection Plan to allow banks to recoup certain fraud losses on their card portfolios, an exclusive benefit available to its banks. The card networks also have fraud-loss prevention programs that cardholders can enroll in for online shopping; MasterCard offers SecureCode and Visa offers Verified by Visa.

“We use neural networks to constantly monitor customer behavior, and these networks become ‘smarter’ as they see more customer behavior and are able to more quickly detect fraud.”
—Tina Giorgio, ICBA Bancard

Although a lot of the activities designed to prevent and detect fraud are the responsibility of banks, consumers also can and should play a vital role in preventing holiday transaction fraud. They are the first line of defense in any transaction fraud strategy, Giorgio points out. Such cardholder engagement requires consumer education, however, that really should take place year-round. Most community banks are in a strong position to engage their customers and should investigate which methods are most effective at promoting transaction safety to their cardholders. Some communication methods are more effective for older customers than for younger customers, and banks need to map a detailed plan that employs engagement throughout the year.

Finally, debit and credit cardholders could be educated about the extra safety of digital wallets, which do not involve card numbers in their mobile transactions. “More and more retailers are adopting Apple Pay, Android Pay and Samsung Pay,” Giorgio explains. “Visa and MasterCard also have wallet solutions, as do a number of third-party providers.”

Data Breach Resources

Amid an increase in high-profile data security incidents, ICBA and ICBA Bancard are reminding community bankers of available resources to help them respond to an attack.

In addition to ICBA Bancard’s exclusive Fraud Loss Protection Plan (, ICBA offers a number of resources for members on its Data Breach Toolkit webpage ( The resource center provides draft customer communications, press releases and other useful documents that can be customized for your
community bank.

For more information about ICBA Bancard’s fraud-related offerings, contact its risk department at

William Atkinson is a writer in Illinois.