New Javelin Report Benchmarks 25 Top Credit Card Issuers for Consumer Identity Safety Features

SAN FRANCISCO--(BUSINESS WIRE)--Javelin Strategy & Research announced today results from their annual Card Issuers Identity Safety Scorecard Report, raising greater awareness about the impact of credit card fraud on consumers and identifying the most recent trends on how to work with cardholders to effectively battle identity fraud. In this report Javelin scores 25 of the nation’s top credit card issuers against a benchmark of criteria for customer safety features essential to fraud Prevention, Detection and Resolution™.

“Card issuers have done a excellent job with providing comprehensive resolution services that essentially make consumers ‘whole’ after fraud is committed”

“Card issuers have done a excellent job with providing comprehensive resolution services that essentially make consumers ‘whole’ after fraud is committed,” said James Van Dyke, President of Javelin Strategy & Research. “However, our data shows that consumers want to play a proactive role in monitoring and protecting their accounts. We believe this creates an important opportunity for card issuers to more actively partner with consumers, which will help to reduce overall fraud loss, as well as improve consumer loyalty.”

Javelin scores credit card issuers against a benchmark of highly-specific safety criteria for each category area of Prevention, Detection and Resolution. The benchmark is based on extensive surveys of both fraud victims and institution practices, so that the Prevention, Detection and Resolution criteria reflect card features that address current trends on how to effectively battle identity fraud in the card portfolio.

Overall, Bank of America achieved top honors in Javelin’s 2008 Card Issuers’ Identity Safety Scorecard; second place went to Discover, followed by FNB Omaha and U.S. Bank. Javelin also benchmarked card issuers within each category area:

In the Prevention category, the top three card issuers were Bank of America in first position, followed by FNB Omaha and then Discover.
In the Detection category, American Express leads, then U.S. Bank, in third position, Bank of America.
In the Resolution category top honor is equally shared by seven card issuers including, American Express, Bank of America, Discover, JPMorgan Chase, State Farm Bank, Wachovia, and WaMu.

The scorecard provides insight into the state of safety features among credit card issuers, highlighting strides being made to advance consumer safety. It also offers recommendations for improvements and expansion of features in each category area of Prevention, Detection and Resolution.

Overall credit card issuers are honing in on online purchase authentication, with 84% of issuers offering secondary passwords for online purchases through programs such as Verified by Visa and Mastercard SecureCode™, as well as virtual account numbers (VANs).
Paper turn-off is becoming a more ubiquitous offering among card issuers, as electronic statements not only help the environment, but from a fraud prevention perspective, consumers lessen the risk of identity theft from stolen or discarded paper statements.
Card Issuers have made considerable strides in providing alerts for changes in personal information, with the average percentage of top issuers offering alerts for changes to physical address dramatically jumping from 16% in 2007 to 56% this year.
User-defined limits and prohibitions (UDLAPS) on customer-specific accounts activity continues to be overlooked despite the ability of UDLAPS to prevent fraud.
While all of the leading credit card issuers maintain a zero liability policy for fraudulent transactions, only four out of ten reverse fraudulent charges within 24 hours.

“Last year, identity fraud reached $45 billion in losses and affected 8.1 million American consumers, so identity protection is now a mainstream issue with considerable public awareness,” said Van Dyke. “Credit card issuers benefit from our research because is based on actual consumer data. In the case of this year’s Credit Card Issuer’s Identity Safety Scorecard, Javelin research demonstrates that concerns about identity fraud not only influences consumers purchasing behaviors, it defines what credit cards they will use.”

What Consumers Need to Know

Because fraud can be committed through so many methods, consumers are advised to utilize a variety of effective measures to protect themselves. Javelin provides consumer information for identity protection at www.idsafety.net. The website was created to raise awareness about the impact of identity fraud and highlights important safety measures consumers can follow to protect their identity. Featured on the site is an easy-to-take Safety Identity Quiz for consumers to learn if their daily habits are keeping their identity safe or putting them at risk.

Javelin’s Methodology for the Card Issuer Safety Scorecard Report

Javelin conducted rigorous and comprehensive research on consumer-facing identity fraud Prevention, Detection and Resolution features. Javelin ranked 25 of the nation’s top credit card issuers on the services and measures they have implemented in partnership with consumers to protect against identity fraud. It analyzed data supplied by the issuers’ customer service representatives (CSRs) and consulted information available on card issuers’ websites. Javelin researchers validated the process with firsthand reviews of actual features in selected cases. The research employed a multi-disciplinary approach: statistical analysis, review of features and policies on card issuer websites, and mystery shopping with multiple senior level customer service representatives. The Prevention and Detection categories were weighted more heavily than Resolution due to the greater potential benefits and cost savings.

About Javelin Strategy & Research

Javelin is the leading independent provider of nationally-representative, quantitative research focused exclusively on financial services topics. Based on the most rigorous statistical methodologies, Javelin conducts in-depth primary research studies to pinpoint dynamic risks and opportunities. Javelin helps its clients achieve their business initiatives through three service offerings, including syndicated research subscriptions, custom research projects and strategic consulting. The company’s client list includes some of the largest banks, credit unions and card issuers, as well as significant technology enterprises in the financial services industry.

For more information about the, 2008 Card Issuers’ Identity Safety Scorecard Report, the 2008 Identity Fraud Survey Report or other Javelin reports, please visit www.javelinstrategy.com/research or call (925) 225-9100 extension 35.