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Javelin Study Finds Card Issuers Continue to Lag in Fraud Prevention and Detection

Javelin Strategy & Research issued results of its Fifth Annual Card Issuers' Identity Safety Scorecard and concluded that although card companies are improving their fraud prevention and detection techniques, these areas still lag behind banks' capabilities in after-the-fact resolution.

Javelin analyzed the top 25 U.S. card issuers' techniques for protecting customers from identity fraud. The firm also incorporated data from annual household, consumer and issuer surveys using Javelin's "Prevention, Detection and Resolution" criteria to more accurately reflect customer demands and trends in how issuers protect against fraud.

Bank of America (Charlotte) was the overall winner for its ability to protect its card customers, especially at the resolution stage. BB&T (Winston-Salem, N.C.) took the No. 1 spot in the prevention category and Discover Financial Services (Riverwoods, Ill.) was tops in detection.

Although there was a continued lag in detection and prevention, the study also noted that issuers are making strides in using the mobile channel to help customers manage their accounts by allowing them to use their mobile devices for alerts and account-related limits.

"Since first conducting the Safety Scorecard five years ago, we have found year-over-year that issuers have excelled in fraud resolution," said Mary Monahan, managing partner and research director at Javelin, in a statement. "But they must continue to improve prevention and detection capabilities by offering specific new features that address the greatest areas of vulnerability. Financial institutions that partner with customers through evolving safety methods will find methods to prosper, even in tough economic conditions."

The complete list of best of class winners includes:

  • Overall " Bank of America (Discover finished second, J.P. Morgan Chase finished third)
  • Prevention " BB&T Bank (Bank of America finished second, PNC Bank finished third)
  • Detection " Discover Financial Services (Citibank, First National Bank of Omaha and JPMorgan Chase tied for second)
  • Resolution " Bank of America (Barclays, Discover, J.P. Morgan Chase and State Farm tied for second)

The report also analyzed methods in use at American Express, Capital One, Credit One, Fifth Third, GE Money, HSBC, Navy Federal Credit Union, Nordstrom, Pentagon Federal Credit Union, RBS, SunTrust, Target, Town North Bank, USAA, U.S. Bank and Wells Fargo.

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