The following POS transaction are monitored:• Multiple use of Bankcards at the same merchant outlet on a single day • Bankcards used at more than 2 different merchant outlets in our netw
Trang 1Card fraud in Hungary
(case study ) and
MON™
fraud prevention system
Mr Antal KUTHY Antal.Kuthy@egroup.hu
President-CEO, E-GROUP Plc Board Member of Hungarian Assoc Of IT Companies
& Chairman, Hungarian-Hong Kong Innovative Business
Council
Trang 2= Banking Front-Office Technology
Trang 3Integrated Product Portfolio
Trang 4Card fraud in Hungary
( a case study )
Trang 5OTP Group
Merkantil Group
(leasing group) OTP Building Society Ltd
OTP Mortgage Bank Ltd.
OTP-Garancia
Ltd.
Hungarian International Finance
OTP Factoring
Ltd. OTP Fund Services
Ltd OTP Travel Ltd. OTP National Health Fund
Trang 6cards issued connected to retail accounts 3023000 3162000 4,6
number of the Bank’s ATMs 1168 1305 11,2
Total number of cards issued in 2003 3599000
FYI: Hu popolution is only 9.5m, so over 60% of card
market)
Trang 7HUF1,084.8 billion (2005 over 10m)
• The number of purchases on POS terminals at merchants was 42.8 million (34.1% increase) valuing HUF351.4
billion (34.1% increase).
1 EUR=250 HUF
Trang 10• Counterfeited cards:
• 74% on POS
• 26% on ATM (2003)
( this rate in 2000 was 100% POS.)
• ATM fraud is technical based
• Where use PIN code (POS) the fraud rate is smaller
• ATM robbery takes only <5 minutes
• Team size: 10 specialists enough
Nature of counterfeited cards transactions
Trang 11The following POS transaction are monitored:
• Multiple use of Bankcards at the same merchant outlet on a single day
• Bankcards used at more than 2 different merchant outlets in our
network on a single day
• Purchases where the transaction amount exceeds the daily
average transaction value of the merchant
Remark: In case of new merchants the value is compared to MCC average (successful transactions)
• Rejected purchases where transaction amount exceeds the
predefined amounts set by rejected codes
1.
Trang 12• All Internet, MOTO and other key-entered transactions
• Transactions made by cards having been used previously at a
merchant during the counterfeiting period (possible
counterfeited transactions in need of extra attention)
• Cash withdrawals made in our post offices or in our branches, if
either the transaction amount exceeds pre-defined limit or more
transactions were initiated with the same card
• Bankcards with more transactions initiated with at Filling
stations – Gas Stations- (MCC 5541) on a single day
• All refunds made by merchants
2.
Trang 13The following ATM transactions are monitored:
• Too many cash disbursement trials with a card on a single
day considering cardholders’ average spending habit
• Banckards used both before and after midnight
• Captured bankcards
• Bankcards that have been used multiple days, „ongoing”
Trang 14OTP’s acquiring network monitoring
systems
Off-line Monitoring programs for filtering out merchants with
suspicious activity has been developed …
• Chargeback Monitoring
• Merchant Authorisation Request Monitoring (considering
previous day; off-line):
Analyis of daily card acceptance activity of a merchant outlet such as total number and amount of succesful and declined transaction requests, number
of key entered transactions to magnetic stripe read transactions, purchases with cards with the same BIN etc and compares the data to the average parameters characterizing the outlet.
• High Risk Blocking:
The amount of the suspicious purchase is paid to the merchants after the
issuer bank has confirmed the genuineness of the transaction in question.
Trang 15On-line Monitoring for detecting suspicious POS and ATM
transactions
The following POS transactions are monitored:
• Bankcards used several times at the same merchant
outlet on a single day
• Bankcards used at more than 3 different merchant
outlets on a single day
• Purchases where the transaction amount exceeds the
daily average transaction value of the merchant In case
of new merchants the value is compared to MCC average.
• Bankcards used in different countries on a single day.
• Transactions made by cards that has been used
previously at a CPP merchant during the counterfeiting period (possible counterfeited transactions need extra attention).
Issuer side monitoring systems
1.
Trang 16• Transactions made in risky countries
• All Internet, MOTO and other key-entered transactions
• Suspicious Internet or MOTO terminals, where possibly fraudulent
transactions occurs with generated account numbers
• Cash withdrawals made in branches and in post offices where
transaction amount exceeds the predefined limits.
• Bankcards which more than the set prepaid mobile phone
transactions via Hungarian ATMs (MCC 4816) are initiated with on a single day
The following ATM transactions are monitored:
• Too many cash disbursement trials with a card on a single day
considering cardholders’ average spending habit
• Banckards used both before and after midnight
• Bankcards used at ATMs located at high risk areas
• Captured bankcards
• Bankcards that have been used more days running abroad
Trang 17• Off-line Monitoring and other instruments to minimize fraud
Issuer Referral Call Service
– Off-line Monitoring Program:
Transactions under floor limit are monitored.
– Collusive Cardholder Monitoring
• Blocked and Expired Card Monitoring:
In case of transactions under floor limit with non-existing cards,
cards are inserted into the international stop-list If
continuous fraudulent usage arises Acquirer banks are also advised of the phenomenon
• SMS Control Service („MONEYGUARD” : most succesful innovation implemented 6 years ago)
• Transactions number which appear in the monitoring
system: 3-10,000 / day (>>> Intelligent Analysis is necessary, special high value add expert systems)
Trang 19OTP Bank as Acquirer
Total Reported Fraud / Sales Ratio
Basis Points
Trang 20OTP Bank as Issuer
Total Reported Fraud / Sales Ratio
Basis Points
Trang 21End of 1st Part of
Presentation Antal.KUTHY@egroup.hu