Credit Card Safety: How Issuers Are Failing You

NEW YORK (MainStreet) — Javelin Strategy and Research recently released its seventh annual Card Issuer’s Safety Scorecard, an in-depth analysis of how well credit card issuers prevent, detect and resolve fraud.

The research was used to rank the most 23 most popular credit card issuers based on performance (see the top 10 in this MainStreet roundup, but also provided some valuable insights into what most credit card issuers are doing right and what they could do better. 

“Issuers overall have made great progress in resolution,” Phil Blank, head security and risk analyst for Javelin Strategy & Research, tells MainStreet. “But they are not keeping up with prevention, and detection practices have fallen off.”

In other words, most issuers are adept at addressing fraud after it occurs – with a majority offering zero liability for fraudulent transactions, 24/7 account suspension options, next-day card replacement and personal assistance from a trained representative– but they have yet to launch an adequate pre-emptive strike.

Blank’s sentiment is illustrated best by Citigroup (Stock Quote: C), which recently experienced a data breach that compromised customers’ credit card numbers and other personal information, resulting in $2.7 million in fraudulent charges. The bank squeaked into Javelin’s top 10 list of the safest credit card issuers by virtue of its detection and resolution score, though it only received 22 out of a possible 45 points for fraud prevention.

But Citi isn’t the only issuer who has yet to think proactively about fraud prevention, a shortcoming Blank says consumers contribute to as well.

“The feeling in the industry is that consumers don’t want to be involved in the security,” Blank says, explaining that both parties need to get out of this mindset and that the consumer should play a more active role in account monitoring and maintenance. 

He suggests, for instance, that issuers let consumers set their limits for transaction size, cash advances, foreign transactions and transactions taking place when a card isn’t present, an option that was missing from every issuer in the study.