ST. PETERSBURG, Fla.–PSCU said it has deployed additional technology to minimize loyalty rewards redemption fraud for all credit unions using its CURewards program.
“A fast-growing trend globally, loyalty fraud is an easy way for fraudsters to launder money by stealing and then reselling rewards points or goods,” PSCU said. “Using an advanced authentication process that validates all entities in the redemption loop – the device, the member and the redemption transaction – the new fraud prevention tool operates on a comprehensive set of rules for detecting and preventing such fraudulent transactions, without relying on information provided by the member.”
The tool’s unique, risk-score identification process and digital risk engine were instrumental in reducing loyalty fraud in 11 attempts (1.2 million in points value) during the PSCU pilot phase of implementation, the CUSO said. It added it is bringing this added benefit to CURewards credit unions at no extra charge.
“We jumped at the opportunity to pilot test the new tool, as some of our members had recently experienced fraudulent rewards redemptions,” said Liz Fee, vice president of payments and deposits at Citadel Federal Credit Union in Exton, Penn. “This is a new criminal angle our members are not sensitized to, so we found they appreciated knowing that we were monitoring redemption activity for them and holding all suspicious redemptions for confirmation of legitimacy before allowing them to be fulfilled.
“Having PSCU’s 24/7 Risk Management team monitor and connect with our member regarding suspicious redemption requests proved to be timely, as PSCU serves cardholders during the hours most credit unions are closed,” continued Fee. “At the CUSO level, PSCU can spot trends, which can lead to preventing potential redemption fraud at other PSCU-owner credit unions that use CURewards to build loyalty.”
PSCU reported that more than 330 credit unions, representing 3.5 million cardholders, utilize PSCU’s CURewards to boost member loyalty.
“When implemented with the CURewards loyalty platform, the tool provides one of the most sophisticated workbenches for analysis and fraud detection on the market,” PSCU said. “Unlike other tools that focus on the device, the member or the transaction, this tool detects suspicious activity through digital risk-engine rules, blocking and eliminating blacklisted devices, inconsistent location indicators, form-filling behavior, and multiple redemptions from different identities on a single device.”
PSCU Now Payments Provider For CCUA
Separately, PSCU has been named the payments provider for the Cooperative Credit Union Association (CCUA), the CUSO announced.
Under terms of the agreement, PSCU will establish long-term servicing relationships with 44 credit unions, representing 47,000 credit and debit accounts.
“PSCU is looking forward to collaborating with CCUA to deliver a robust suite of payments solutions – backed by 24/7/365 cardholder servicing – that will help the CCUA credit unions achieve their strategic objectives for growth and member service,” said Chuck Fagan, PSCU president and CEO.
PSCU said it will bring scale to the market. It is one of First Data's largest clients and one of Visa's ten largest customers, serving more than 20.2 million credit and debit cardholders. “PSCU partners with credit unions to enable growth and provide an unparalleled member experience. It will leverage its scale to bring best-in-class technology, resources and solutions for the CCUA credit unions,” PSCU explained.
CCUA CEO Paul Gentile said one of the core reasons for selecting PSCU was its industry-leading fraud prevention systems.