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The best method for preventing fraud and achieving FACT Act Compliance is Safe2Change.
Current Address-Validation Processes
Manual address-validation processes, including mail, email or phone calls, are often imperfect, inefficient and time-consuming. And after November 1, they’ll also be noncompliant.
U.S. Mail
Cardholder notification via U.S. Mail is a commonly used fraud-control practice. But that won’t be the case in a post-FACT Act world. Given the new requirements, a financial institution or credit issuer notifying a customer via mail won’tbe able to issue a new card immediately — and will likely need to wait several days for a letter to be created, sent, received, and responded to. Before you know it, the unhappy cardholder will have been without a card for a week or more. Under the new rules, customer mail notification and expedited card delivery programs simply cannot co-exist, resulting in lost revenue opportunities and damaged customer service.
With email, the biggest challenge is overcoming the requirement to ensure that the email message provides a “clear and conspicuous” notification, as required by the FACT Act. Because of the proliferation of email phishing scams, it may be very difficult for a cardholder to discern between a legitimate email notification coming from their issuer and a fraudulent one coming from an email scammer. There is also the risk that a genuine email from the issuer will not get through to the cardholder. Often, critically important, legitimate messages coming from a financial services company end up in the recipient’s “junk” folder.
Phone
Reaching cardholders by phone can also be problematic. Many consumers don’t trust unsolicited calls from financial institutions or credit issuers. A lot of people won’t discuss their personal information during a phone call that was not self-initiated.
