HAMPTON - In the nerve center of Hampton-based Old Point National Bank, there are hi-tech computers keeping track of ten of thousands of transactions. Every move a customer makes with his debit or credit card is tracked to create a customer profile In order to help identify fraud.
"They use very complicated computer algorithms to figure this stuff out. It actually is pretty amazing the type of technology they use and the types of inputs they use to find the patterns. They look at patterns across the entire consumer base and then overlay that with your type of usage," explains Robert Shuford, Old Point's senior executive vice president.
Those patterns are what makes it easier for banks to spot suspicious activity. Often times,banks know something's wrong before you do.
Yorktown resident Carissa Butler had no idea someone was trying to use her credit card number in Florida until she got a call from her bank.
"Clearly I didn't because I live in Virginia and the charges happened in Florida," says Butler.
Shuford says a customer who's the victim of fraud has zero liability if it's reported or caught within a reasonable amount of time. That puts pressure on the banks to sharpen their detection skills because fraud is costing them millions.
Fraud expert and ODU accounting professor Dr. Douglas Ziegenfuss says people would be surprised to learn what banks know about them. What they learn about you protects their bottom line.
"Any losses that they have to incur obviously go right down to the bottom line and jeopardize their profitability," he notes.
According to California-based Guardian Analytics, a leader in banking fraud prevention solutions, banks track lots of information about you to determine your spending profile. CEO Terry Austin says when you interact with a bank, there's a huge amount of information created. For instance, if you bank online, your bank is tracking the IP addresses of the computers you normally use, the browser you prefer, what time of day you log on, what kind of transactions you normally do, how long to you usually stay on line and what you click on first, second and last. All of that information helps determine your pattern. When a fraudster hacks in, he will no doubt do something that cracks the mold. That can prompt a bank to shutdown your account until they notify you.
In some cases, those shutdowns are an inconvenience. Harold Roach banks at a small credit union that can't afford the high price of fraud. Highly sensitive fraud detectors have led to his account being shutdown several times. He's unable to use his debit card if he performs ten transactions in less than 24 hours. For example, after paying several bills on line, he went to grab a bite to eat and his card was declined.
"All of sudden, it's been cut off and you go to use it because you've exceeded some arbitrary number of transactions that you can conduct in a certain period of time," Roach says.
Shuford says shutting down an account is part of the delicate balance between customer security and convenience. Most shutdowns happen when transactions pop up from overseas if a customer doesn't inform the bank about an out of country trip. An account also could get shut down if a transaction appears with an establishment that is a recent target of fraud.