Javelin's 2010 Card Issuer's Identity Safety Scorecard

Sixth Annual Card Issuer’s Safety Scorecard: Red Flags Rule Shows Signs of Success as Criminals Shift Methods

Sixth Annual Card Issuer’s Safety Scorecard
	Download a sample report
	Purchase Sixth Annual Card Issuer’s Safety Scorecard Report
	Have a question? Call us at (925) 225-9100 ext. 31 or reach us by email atinquiry@javelinstrategy.com

Overview

The Javelin 2010 Card Issuer’s Identity Safety Scorecard analyzes the top 26 card issuers’ capabilities in protecting customers from identity fraud. This is the sixth consecutive year that Javelin has conducted this study, rating issuers on prevention, detection, and resolution TM criteria. The goal of the scorecard is to measure existing issuer safety features, accurately reflect customer knowledge and expectations, and to make valuable recommendations to issuers to best safeguard their customer base and mitigate fraud losses. Javelin recognizes industry trends and educates issuers on how to maximize customer relationships and efforts in helping to most effectively fight fraud.

Primary Questions:

• Which card issuers are best suited to safeguard their customers from identity fraud?


• Which card issuers excelled in prevention, detection, and resolution TM capabilities?


• In what areas are issuers succeeding and in what areas do they need to improve to better protect their customers’ safety?


• Where are issuers most vulnerable and how can they minimize fraud loss and increase customer satisfaction?


• What are the existing criminal trends, and how should issuers adapt their strategies to keep up with current fraud tactics?


• Where is the industry heading, and what are the security practices and trends of the future?

Methodology

Javelin tightened its criteria this year, raising the bar for card issuers to comprehensively and more proactively address customer safety. Issuers only received credit for a feature if they could assuredly confirm that they offered it. Five new features were added as well, all of which challenged issuers to offer new, cutting‐edge customer safety capabilities. The prevention and detection categories were weighted more heavily than resolution due to greater inherent customer and issuer benefits and cost‐saving opportunities.

That being said, the scope of this report is limited to customer‐facing security measures of card issuers and is reliant upon information supplied by customer service representatives (CSRs) and content found on issuers’ websites. This report does not intend to nor claims that it measures card issuer customer‐facing security in its entirety, or back‐end, behind‐the‐scenes security practices that issuers put into place. The survey was conducted from March 12, 2010 through April 9, 2010, with Javelin researchers evaluating and validating the offerings of the top 26 card issuers.

First, researchers thoroughly conducted research on card issuer sites. Javelin researchers searched and navigated throughout the issuer websites, finding as much documentable confirmation of available issuer offerings. URLs as well as the exact verbiage for features found online were recorded for each criterion offered by the issuer. A week of website research was conducted before proceeding to contact CSRs.

The mystery‐shopper approach included researchers calling the numbers provided on the issuer websites, most notably credit card and customer service departments. Researchers were often transferred by call centers if additional information for a specific criterion was best suited to be answered by a different department within the card issuing company. The researcher explained that he/she was a potential cardholder and had concerns regarding the security of credit cards and identity fraud, and would like to speak with a seniorlevel CSR. If the researcher had reason to doubt the tenure or knowledge of a particular CSR, the call was immediately terminated and the process was begun anew.

Numerous calls were made and required to ensure accuracy of issuer information. The required number of calls on a per‐issuer basis ranged from 4 to 8, with an average of 6.2 calls per issuer. More senior‐level and knowledgeable CSRs were often more effectively able to answer the survey questions, requiring fewer calls to a particular issuer, although their responses were still verified by additional calls. The total number of CSR calls made per institution was recorded, along with each CSR’s name or employee number (for verification), date and time of the call, the department spoken with, and how long the CSR has worked for the issuer (when shared by the CSR).

More Information

Related:

Bank of America Most Secure in Fraud Survey

Javelin's 2010 Card Issuer's Identity Safety Scorecard

Sixth Annual Card Issuer’s Safety Scorecard: Red Flags Rule Shows Signs of Success as Criminals Shift Methods

Sixth Annual Card Issuer’s Safety Scorecard
	Download a sample report
	Purchase Sixth Annual Card Issuer’s Safety Scorecard Report
	Have a question? Call us at (925) 225-9100 ext. 31 or reach us by email atinquiry@javelinstrategy.com

Overview

The Javelin 2010 Card Issuer’s Identity Safety Scorecard analyzes the top 26 card issuers’ capabilities in protecting customers from identity fraud. This is the sixth consecutive year that Javelin has conducted this study, rating issuers on prevention, detection, and resolution TM criteria. The goal of the scorecard is to measure existing issuer safety features, accurately reflect customer knowledge and expectations, and to make valuable recommendations to issuers to best safeguard their customer base and mitigate fraud losses. Javelin recognizes industry trends and educates issuers on how to maximize customer relationships and efforts in helping to most effectively fight fraud.

Primary Questions:

• Which card issuers are best suited to safeguard their customers from identity fraud?


• Which card issuers excelled in prevention, detection, and resolution TM capabilities?


• In what areas are issuers succeeding and in what areas do they need to improve to better protect their customers’ safety?


• Where are issuers most vulnerable and how can they minimize fraud loss and increase customer satisfaction?


• What are the existing criminal trends, and how should issuers adapt their strategies to keep up with current fraud tactics?


• Where is the industry heading, and what are the security practices and trends of the future?

Methodology

Javelin tightened its criteria this year, raising the bar for card issuers to comprehensively and more proactively address customer safety. Issuers only received credit for a feature if they could assuredly confirm that they offered it. Five new features were added as well, all of which challenged issuers to offer new, cutting‐edge customer safety capabilities. The prevention and detection categories were weighted more heavily than resolution due to greater inherent customer and issuer benefits and cost‐saving opportunities.

That being said, the scope of this report is limited to customer‐facing security measures of card issuers and is reliant upon information supplied by customer service representatives (CSRs) and content found on issuers’ websites. This report does not intend to nor claims that it measures card issuer customer‐facing security in its entirety, or back‐end, behind‐the‐scenes security practices that issuers put into place. The survey was conducted from March 12, 2010 through April 9, 2010, with Javelin researchers evaluating and validating the offerings of the top 26 card issuers.

First, researchers thoroughly conducted research on card issuer sites. Javelin researchers searched and navigated throughout the issuer websites, finding as much documentable confirmation of available issuer offerings. URLs as well as the exact verbiage for features found online were recorded for each criterion offered by the issuer. A week of website research was conducted before proceeding to contact CSRs.

The mystery‐shopper approach included researchers calling the numbers provided on the issuer websites, most notably credit card and customer service departments. Researchers were often transferred by call centers if additional information for a specific criterion was best suited to be answered by a different department within the card issuing company. The researcher explained that he/she was a potential cardholder and had concerns regarding the security of credit cards and identity fraud, and would like to speak with a seniorlevel CSR. If the researcher had reason to doubt the tenure or knowledge of a particular CSR, the call was immediately terminated and the process was begun anew.

Numerous calls were made and required to ensure accuracy of issuer information. The required number of calls on a per‐issuer basis ranged from 4 to 8, with an average of 6.2 calls per issuer. More senior‐level and knowledgeable CSRs were often more effectively able to answer the survey questions, requiring fewer calls to a particular issuer, although their responses were still verified by additional calls. The total number of CSR calls made per institution was recorded, along with each CSR’s name or employee number (for verification), date and time of the call, the department spoken with, and how long the CSR has worked for the issuer (when shared by the CSR).

More Information

Related:

Bank of America Most Secure in Fraud Survey

NRF Welcomes Senate Approval Of Amendment Requiring 'Reasonable' Debit Card Fees

For Immediate Release Contact: J. Craig Shearman (202) 626-8134 shearmanc@nrf.com NRF Welcomes Senate Approval of Amendment Requiring 'Reasonable' Debit Card Fees WASHINGTON, May 13, 2010 – The National Retail Federation tonight welcomed Senate approval of an amendment to financial services reform legislation that would direct the Federal Reserve to determine “reasonable and proportional” transaction fees for debit cards. “Main Street America bailed out the biggest banks in this country not so long ago,” NRF Senior Vice President and General Counsel Mallory Duncan said. “Passage of the Durbin amendment ensures that those same banks won’t repay our generosity by undermining the fairness and integrity of the checking and debit card system.” The Senate voted 64-33 tonight to approve an amendment to S. 3217, the Restoring American Financial Stability Act of 2010, offered by Majority Whip Richard Durbin, D-Ill. NRF counted consideration of the amendment as a key vote to be included in NRF’s annual ranking of lawmakers on issues important to the retail industry. NRF earlier today wrote to all members of the Senate to urge passage of the amendment. “Plastic checks – debit cards – formerly passed at face value, but now the biggest banks and card companies are using them to circumvent the system and are reducing the face value of debit card transactions through higher fees,” NRF Senior Vice President for Government Relations Steve Pfister said in the letter. “This hurts retailers and merchants of all sizes, including doctors’ offices, restaurants and florists, and it causes all of our customers to pay more.” The amendment would require the Federal Reserve to establish “reasonable and proportional” interchange fees for debit transactions. The fees would have to take into consideration both the actual cost of processing the transactions and the fact that paper checks are paid at face value. The fee for debit cards currently averages about 1 percent and is charged to merchants each time a card is swiped to pay for a purchase. NRF estimates that the fees cost merchants at least $10 billion a year, and card industry practices effectively require that they be built into the price of merchandise, driving up costs for consumers. The amendment would exempt an estimated 99 percent of credit unions and banks by applying only to financial institutions with $10 billion or more in assets. But most consumers would still be protected because the majority of cards are issued by a handful of the nation’s largest banks. As the world's largest retail trade association and the voice of retail worldwide, NRF's global membership includes retailers of all sizes, formats and channels of distribution as well as chain restaurants and industry partners from the United States and more than 45 countries abroad. In the United States, NRF represents the breadth and diversity of an industry with more than 1.6 million American companies that employ nearly 25 million workers and generated 2009 sales of $2.3 trillion. www.nrf.com ###

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NRF Welcomes Senate Approval Of Amendment Requiring 'Reasonable' Debit Card Fees

For Immediate Release Contact: J. Craig Shearman (202) 626-8134 shearmanc@nrf.com NRF Welcomes Senate Approval of Amendment Requiring 'Reasonable' Debit Card Fees WASHINGTON, May 13, 2010 – The National Retail Federation tonight welcomed Senate approval of an amendment to financial services reform legislation that would direct the Federal Reserve to determine “reasonable and proportional” transaction fees for debit cards. “Main Street America bailed out the biggest banks in this country not so long ago,” NRF Senior Vice President and General Counsel Mallory Duncan said. “Passage of the Durbin amendment ensures that those same banks won’t repay our generosity by undermining the fairness and integrity of the checking and debit card system.” The Senate voted 64-33 tonight to approve an amendment to S. 3217, the Restoring American Financial Stability Act of 2010, offered by Majority Whip Richard Durbin, D-Ill. NRF counted consideration of the amendment as a key vote to be included in NRF’s annual ranking of lawmakers on issues important to the retail industry. NRF earlier today wrote to all members of the Senate to urge passage of the amendment. “Plastic checks – debit cards – formerly passed at face value, but now the biggest banks and card companies are using them to circumvent the system and are reducing the face value of debit card transactions through higher fees,” NRF Senior Vice President for Government Relations Steve Pfister said in the letter. “This hurts retailers and merchants of all sizes, including doctors’ offices, restaurants and florists, and it causes all of our customers to pay more.” The amendment would require the Federal Reserve to establish “reasonable and proportional” interchange fees for debit transactions. The fees would have to take into consideration both the actual cost of processing the transactions and the fact that paper checks are paid at face value. The fee for debit cards currently averages about 1 percent and is charged to merchants each time a card is swiped to pay for a purchase. NRF estimates that the fees cost merchants at least $10 billion a year, and card industry practices effectively require that they be built into the price of merchandise, driving up costs for consumers. The amendment would exempt an estimated 99 percent of credit unions and banks by applying only to financial institutions with $10 billion or more in assets. But most consumers would still be protected because the majority of cards are issued by a handful of the nation’s largest banks. As the world's largest retail trade association and the voice of retail worldwide, NRF's global membership includes retailers of all sizes, formats and channels of distribution as well as chain restaurants and industry partners from the United States and more than 45 countries abroad. In the United States, NRF represents the breadth and diversity of an industry with more than 1.6 million American companies that employ nearly 25 million workers and generated 2009 sales of $2.3 trillion. www.nrf.com ###

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U.S. Senate Passes Commonsense Swipe Fee Reform to Aid Small Business and Consumers 

Main Street merchants applaud Senate for taking immediate action to help retailers and their customers across the nation

WASHINGTON, May 13 /PRNewswire-USNewswire/ -- The Merchants Payments Coalition, representing 2.7 million U.S. businesses, released the following statement after the U.S. Senate voted to include commonsense swipe fee reform in the Restoring American Financial Stability Act of 2010 through an amendment introduced by Sen. Richard Durbin. Specifically, the measure will ensure the debit card transactions are reasonable and proportional to the cost of processing the transaction:

"Tonight, the Senate stood up to the credit card companies and big banks and stood strong for Main Street businesses and our customers. Swipe fees have spiraled out of control in recent years, and this amendment is necessary to rein in these excessive fees and ensure that Main Street receives a fair shake. These fees are harmful across the board -- from large businesses to small retailers to American consumers."

"Because of Sen. Durbin's amendment and his efforts to push this measure through the Senate, business owners and their customers are one step closer to real, tangible reform. This amendment will enhance transparency and help protect businesses and their customers alike from these unfair, hidden fees."

"Now that the Senate has acted in such a strong and unambiguous way, business owners across the country hope that Congress will continue moving forward with this measure to bring fairness to credit and debit card swipe fees -- and that it eventually reaches President Obama's desk to become law."

The Merchants Payments Coalition is a group of retailers, supermarkets, drug stores, convenience stores, fuel stations, on-line merchants and other businesses who are fighting against unfair credit card fees and fighting for a more competitive and transparent card system that works better for consumers and merchants alike. The coalition's member associations collectively represent about 2.7 million stores with approximately 50 million employees.  For more information about credit card swipe fees, please visit http://www.UnfairCreditCardFees.com.

SOURCE The Merchants Payments Coalition

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U.S. Senate Passes Commonsense Swipe Fee Reform to Aid Small Business and Consumers 

Main Street merchants applaud Senate for taking immediate action to help retailers and their customers across the nation

WASHINGTON, May 13 /PRNewswire-USNewswire/ -- The Merchants Payments Coalition, representing 2.7 million U.S. businesses, released the following statement after the U.S. Senate voted to include commonsense swipe fee reform in the Restoring American Financial Stability Act of 2010 through an amendment introduced by Sen. Richard Durbin. Specifically, the measure will ensure the debit card transactions are reasonable and proportional to the cost of processing the transaction:

"Tonight, the Senate stood up to the credit card companies and big banks and stood strong for Main Street businesses and our customers. Swipe fees have spiraled out of control in recent years, and this amendment is necessary to rein in these excessive fees and ensure that Main Street receives a fair shake. These fees are harmful across the board -- from large businesses to small retailers to American consumers."

"Because of Sen. Durbin's amendment and his efforts to push this measure through the Senate, business owners and their customers are one step closer to real, tangible reform. This amendment will enhance transparency and help protect businesses and their customers alike from these unfair, hidden fees."

"Now that the Senate has acted in such a strong and unambiguous way, business owners across the country hope that Congress will continue moving forward with this measure to bring fairness to credit and debit card swipe fees -- and that it eventually reaches President Obama's desk to become law."

The Merchants Payments Coalition is a group of retailers, supermarkets, drug stores, convenience stores, fuel stations, on-line merchants and other businesses who are fighting against unfair credit card fees and fighting for a more competitive and transparent card system that works better for consumers and merchants alike. The coalition's member associations collectively represent about 2.7 million stores with approximately 50 million employees.  For more information about credit card swipe fees, please visit http://www.UnfairCreditCardFees.com.

SOURCE The Merchants Payments Coalition

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http://www.UnfairCreditCardFees.com

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RILA Reacts to Passage of Swipe Fees Reform Amendment

ARLINGTON, Va., May 13 /PRNewswire-USNewswire/ -- The Retail Industry Leaders Association (RILA) reacted to the Senate passage of an amendment aimed at reforming the excessive swipe fees charged by big banks and credit card companies with a statement from Katherine Lugar, executive vice president for government affairs.

The amendment (S. Amdt 3989) was offered by Senator Richard Durbin (D-IL) and Passed 64 to 33.  This commonsense amendment to the Restoring American Financial Stability Act of 2010 will stop credit card networks from imposing anti-competitive restrictions on retailers and ensure that fees charged for debit transactions are reasonable and proportional to the costs incurred in processing the transaction.



More than 80 percent of all swipe fees are collected by the 10 largest banks. The amendment only affects banks with $10 billion or more in assets, thus exempting more than 99 percent of community banks and credit unions, which together collect merely a fraction of the total swipe fees collected annually.

"This is a great victory for consumers and retailers. With this vote today, the U.S. Senate has stood up to defend consumers and retailers, protecting them from the excessive fees and anti-competitive practices imposed by big banks and credit card companies.



"We commend Senator Durbin for standing up to the big banks and credit card companies and fighting to pass these commonsense reforms. 



"As we move ahead to conference, we will be reminding lawmakers that failure to address this swipe fee reform as part of financial regulatory reform will give the credit card industry a green light to continue raising these rates, harming merchants, charities and all other organizations that accept plastic. We look forward to working with Senator Durbin and countless other bipartisan supporters as the bill moves to conference."  

RILA is the trade association of the world's largest and most innovative retail companies. RILA members include more than 200 retailers, product manufacturers, and service suppliers, which together account for more than $1.5 trillion in annual sales, millions of American jobs and more than 100,000 stores, manufacturing facilities and distribution centers domestically and abroad.

SOURCE Retail Industry Leaders Association

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http://www.retail-leaders.org

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RILA Reacts to Passage of Swipe Fees Reform Amendment

ARLINGTON, Va., May 13 /PRNewswire-USNewswire/ -- The Retail Industry Leaders Association (RILA) reacted to the Senate passage of an amendment aimed at reforming the excessive swipe fees charged by big banks and credit card companies with a statement from Katherine Lugar, executive vice president for government affairs.

The amendment (S. Amdt 3989) was offered by Senator Richard Durbin (D-IL) and Passed 64 to 33.  This commonsense amendment to the Restoring American Financial Stability Act of 2010 will stop credit card networks from imposing anti-competitive restrictions on retailers and ensure that fees charged for debit transactions are reasonable and proportional to the costs incurred in processing the transaction.



More than 80 percent of all swipe fees are collected by the 10 largest banks. The amendment only affects banks with $10 billion or more in assets, thus exempting more than 99 percent of community banks and credit unions, which together collect merely a fraction of the total swipe fees collected annually.

"This is a great victory for consumers and retailers. With this vote today, the U.S. Senate has stood up to defend consumers and retailers, protecting them from the excessive fees and anti-competitive practices imposed by big banks and credit card companies.



"We commend Senator Durbin for standing up to the big banks and credit card companies and fighting to pass these commonsense reforms. 



"As we move ahead to conference, we will be reminding lawmakers that failure to address this swipe fee reform as part of financial regulatory reform will give the credit card industry a green light to continue raising these rates, harming merchants, charities and all other organizations that accept plastic. We look forward to working with Senator Durbin and countless other bipartisan supporters as the bill moves to conference."  

RILA is the trade association of the world's largest and most innovative retail companies. RILA members include more than 200 retailers, product manufacturers, and service suppliers, which together account for more than $1.5 trillion in annual sales, millions of American jobs and more than 100,000 stores, manufacturing facilities and distribution centers domestically and abroad.

SOURCE Retail Industry Leaders Association

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Visa, MasterCard Shares Tumble as Senate Votes to Impose Curbs on Interchange

Dick Durbin Image via Wikipedia

Ahead of the Bell: Visa, Mastercard tumble on vote



(AP) — PHILADELPHIA - Shares of Visa Inc. and Mastercard Inc. fell Friday after the Senate voted to impose curbs on debit card fees paid by businesses to card issuers.

Late Thursday, the Senate passed an amendment proposed by Democratic Whip Dick Durbin that would lower so-called "swipe fees" paid by business when a customer uses a debit card. The amendment is part of a broader Wall Street reform bill, which still needs to get final approval. Businesses pay similar fees for credit card transactions.

"High swipe fees are yet another way that banks and credit card companies hurt small businesses by charging fees that cut into already tight profit margins," Durbin, who represents Illinois, said in a statement.

If the amendment becomes law, it will hurt Visa and Mastercard because its lessens their ability to set prices, regulates debit card interchange fees for the first time and makes negotiations with customers more complicated, Janney Capital Markets analyst Thomas McCrohan said in a note to clients.

Visa shares tumbled $7.42, or 8.7 percent, to $78.31 in premarket trading. Competitor Mastercard slid $22.31, or 9.6 percent, to $210.

While Durbin's legislation only affects debit cards issued by financial institutions with more than $10 billion in assets, there's concern that credit card fees would attract more regulatory oversight.

"The amendment also opens the door for additional scrutiny of credit card interchange fees down the road," McCrohan said.

The Durbin amendment could have unintended consequences as well, he said in a research note, as card issuers raise other fees to make up for lower debit card fees.

Credit Suisse analyst Moshe Orenbuch estimates that a 20 percent reduction of these fees could result in a 2 percent to 4 percent drop in revenue for Visa and Mastercard. He added that his estimate isn't a forecast necessarily, since both companies can act to offset the fee drop.

FBR Capital Markets analyst Scott Valentin said any share weakness should be viewed as a buying opportunity because of the long-term trend of consumers moving from paper forms of payment to electronic.

© 2010 Associated Press. All Rights Reserved.

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Visa, MasterCard Fall on 'Surprising' Debit-Card Vote

‎

BusinessWeek - Peter Eichenbaum - 32 minutes ago

Visa and MasterCard collect royalties from banks tied to card spending. Visa and MasterCard revenue would be “unchanged” if debit interchange fees went to ...

US Senate Swipe-Fee Plan Raises Concerns For Card Companies‎ - Wall Street Journal

Card issuer shares decline as new regulation looms‎ - Reuters

Visa, MasterCard Hit By Durbin Legislation, But Banks Might Be ...‎ - Barron's (blog)

CNNMoney - Chicago Sun-Times (blog)

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