Fair Isaac Fraud Detection Solutions Help Merchants Tackle Card-Not-Present Fraud
Retail industry research reveals CNP fraud growing rapidly, highlights need for advanced fraud detection capabilities
(Minneapolis, Minnesota, USA) - In response to industry research on retail fraud losses, Fair Isaac Corporation (NYSE:FIC) today announced that it delivers advanced fraud detection solutions to help merchants identify and thwart card-not-present (CNP) fraud in real time and safely approve more transactions with less risk.
CNP fraud involves the theft or misuse of card details to pay for goods and services online, by phone or by mail order. Most merchants in the retail and travel industries assume 100 percent of the fraud risk for goods sold through these channels. CNP fraud has become a key challenge for merchants globally, resulting in lost revenues and higher operational costs.
“Card-not-present fraud is increasing in every region around the globe, and at double-digit rates in the U.S. and U.K. markets,” said Dennis Moroney, Senior Analyst, Bank Cards, at TowerGroup. “The growth of e-commerce, along with the importance of mail order/telephone order retailing, especially during the holidays, puts especial emphasis on the importance of winning - and in some cases regaining - consumer confidence.”
Fair Isaac’s Falcon® Fraud Manager for Merchants prevents the loss of legitimate sales by using the company’s patented neural network models and profiling technology to detect minute deviations from normal spending patterns and generate a fraud score. Based on scoring thresholds and merchant-specific fraud prevention rules, the ASP solution enables rapid review of suspicious transactions and intervention before losses are incurred.
Fair Isaac’s Falcon Fraud Manager neural network models are built with knowledge gained from billions of purchases worldwide. Profiling technology captures cardholder characteristics and analyzes them against real-time transactions. Profiles are based on data generated by thousands of merchants using Fair Isaac’s Falcon Fraud Manager technology in millions of transactions every month, enabling the models to learn continuously and update the profiles with new data.
“In any situation where a card is not present and merchants are unable to complete a face-to-face transaction, the opportunity for fraud increases dramatically,” said Raymond Boyle, vice president, Retail Client Services, at Fair Isaac. “Techniques used to perpetrate this kind of fraud are becoming more sophisticated. Closely managing transactional fraud while only minimally impacting legitimate customer sales is a fine balancing act that requires a higher level of technology. Every dollar of fraud captured during the transaction process goes directly to the bottom line. Having led the advancement of fraud protection technologies for more than a decade, Fair Isaac is the right company to help the industry combat this problem.”
A recent study released by UK-based Association of Payment Clearing Services (APACS) shows a similar CNP fraud trend in the UK. According to APACS, CNP fraud losses on UK-issued cards grew from £10 million to £212.6 million between 1997 to 2006, increasing by 16 percent in the last year alone.
Recognized as the leading global payment card fraud detection system, Falcon Fraud Manager protects more than 1 billion payment card accounts across six continents from fraud. It saves businesses millions of dollars every day in the financial services, retail, telecommunications and government sectors and is used by 20 of the top 25 financial institutions worldwide.
About Fair Isaac
Fair Isaac Corporation (NYSE:FIC) combines trusted advice, world-class analytics and innovative applications to help businesses make smarter decisions. Fair Isaac’s solutions and technologies for Enterprise Decision Management turn strategy into action and elevate business performance by giving organizations the power to automate more decisions, improve the quality of their decisions, and connect decisions across their business. Clients in 80 countries work with Fair Isaac to increase customer loyalty and profitability, cut fraud losses, manage credit risk, meet regulatory and competitive demands, and rapidly build market share. Fair Isaac also helps millions of individuals manage their credit health through the www.myFICO.com website.
Fair Isaac Statement Concerning forward-looking Information
Except for historical information contained herein, the statements contained in this press release that relate to Fair Isaac, including statements regarding its Falcon ®Fraud Manager product offering, are forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially, including any unforeseen technical difficulties related to the implementation, use and functionality of the offering, the risks that customers will not perceive material benefits from the offering, failure of the product to deliver the expected results, the possibility of errors or defects in the offering, regulatory changes applicable to the use of consumer credit and other data, and other risks described from time to time in Fair Isaac’s SEC reports, including its Annual Report on Form 10-K for the year ended September 30, 2007. Forward-looking statements should be considered with caution. If any of these risks or uncertainties materializes or any of these assumptions proves incorrect, Fair Isaac’s results could differ materially from Fair Isaac’s expectations in these statements. Fair Isaac disclaims any intent or obligation to update these forward-looking statements.
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