Credit unions are rightfully known for providing outstanding service to their members. But this member-centric philosophy can be put to the test during the most stressful interactions, such as card disputes. According to a survey of more than 300 retailers by Chargeback 911 and Digital Commerce 360, nearly three-quarters reported a rise in chargeback fraud, with more than half saying that so-called “friendly fraud” is a “significant” or “moderate” concern for their business. Another survey from Justt found that the share of U.S. consumers who have filed at least one chargeback in the past year rose by 12% in 2023, to more than three in four.
If credit unions don’t get the service side of these engagements right, they risk creating dissatisfied members and losing relationships. Consumers value the service they receive from the brands they do business with above almost any other factor in the relationship.
Consider that according to Zendesk, 81% of consumers say they would be more likely to make another purchase following a positive customer service experience. On the flip side, 6 in 10 would switch to a competitor after a single poor service experience. Worse yet, according to a Salesforce research, 62% of dissatisfied customers tell others about their bad experiences.
So, how can credit unions continue to provide outstanding member service, and effectively combat incidents of fraud?
Engage Your Members on Your Fraud Team
The member is the front line in your fraud prevention program. Make sure to arm them with the information and tools they need – through ongoing communication and education about the latest threats and best practices.
According to Vipul Verma, VP, Product Management – Protect at Co-op, an effective fraud education program includes regular reminders to keep plastic cards and PINs safe, not sharing OTPs, along with training on how to recognize phishing calls and emails.
“A number of our credit union clients send out frequent communications about Phishing 101 and what to look out for in an email,” Verma says. “The channels they use include email and pop-ups on the website, and some even post mini-online training courses that are easy to absorb and digest.”
Proactively Prevent Fraud
According to Verma, aggressive prevention and detection strategies up front can lead to fewer incidents of fraud and cardholder disputes on the backend, making for a better member experience while reducing potential fraud losses for the credit union.
“The prevention team sets up all of the strategies and fraud tools designed to recognize risky transactions coming from, say a foreign IP address, at a certain dollar threshold and within a certain merchant classification code,” Verma says. “Those sorts of details all factor into whether that transaction gets authorized or declined. Co-op works with the credit union to refine those rules, strategies and the use of overall scores so they're optimized for their particular business.
“And then the detection side is typically where a transaction is declined for whatever reason, and we automatically reach out to the cardholder to determine if they authorized the transaction or not.”
Prevention starts with the member, who – with the help of tools like CardNav® by Co-op card controls and alerts – can decide when, where and how their cards are used. When fraud trends do arise, solutions like Co-op Cooper Fraud Score are there to help credit unions react proactively while minimizing false positive ratios, fraud chargebacks and fraud losses. Credit unions have the option of customizing fraud detection thresholds based on the individual member relationship and the credit union’s relative appetite for risk.
“Those thresholds are customized for the specific credit union based on their risk profile and their appetite for approving transactions in the name of better member service,” Verma says. “For example, a credit union may set different transaction approval rules for a Visa Classic card versus a Visa Preferred member. For the top-level VIP card, the credit union might assign a strategy that allows any type or dollar amount of transaction to go through, without any fraud filters. So, no matter whether they’re buying a $60,000 car or a $6 hamburger at a fast-food drive-through, the purchase will go through, minimizing any inconvenience to the VIP cardholder.”
Reduce Friction in the Dispute Process
Where the rubber meets the road is during the dispute resolution process, when the credit union has its first direct, real-time interaction with the member. With a streamlined digital platform for disputes and chargebacks, the credit union can make that stressful, challenging experience a smoother one for the member. Here’s how:
Cover all the bases in a single call: With a dispute process that features a dynamic intake design, the contact center representative is intelligently guided through the initial cardholder call, reducing – and typically eliminating – callbacks to collect additional case information and ensuring a faster and more efficient member experience.
Ask the member’s communication preferences: Before the initial call is concluded, it’s best to ask the member how they would like to be contacted going forward. This way, communications won’t be missed, and the member gains trust and confidence.
Set clear expectations: According to Verma, dispute agents should remember to set the stage with the member at the end of the call, by telling them exactly what to expect next. The credit union can script this to suit their individual preferences.
“The cardholder is asked prescriptive questions that are specific to their case so they won’t be asked for information that isn’t relevant to what they're calling about, “ says Verma. “At the end of the intake experience, a case is generated immediately, so there's no need for the member to wait or to visit the branch. The agent can actually give the cardholder the case ID right on the phone, and ask them to call back with that number if they have further questions.”
Armed with the right tools, credit unions can use the fraud detection, prevention and dispute processes to turn what is often a fraught interaction into a positive experience for the cardholder, helping to increase member engagement and build trust.
Get your fraud toolshed in tip-top shape with help from Co-op! Start with Co-op Resolution Center, offering centralized management of cardholder claims with rapid response times, personalized service and real-time information access. Next, empower your members with CardNav® by Co-op card controls and alerts, placing them at the first line of defense against fraud. And ask us about Co-op Cooper Fraud Score, a dynamic, integrated, real-time machine learning score to help your credit union react more quickly to fraud trends. Cooper Fraud Score supports your bottom line by reducing false positive ratios, fraud chargebacks and fraud losses.
