New ReD Fraud Alert Service Reduces Chargebacks by 43% in Trial
Sept. 23, 2011
Anti-fraud technology provider Retail Decisions (ReD) has launched a new ReD Fraud Alert service that enables issuers and merchants to easily exchange vital information to fight fraud. The company said ReD Fraud Alert significantly reduces merchant chargebacks as well as the risk of consumers falling victim to fraud. Using information normally exclusive to the issuer, ReD creates a channel to enable its merchants to use a customer’s full account profile to decide whether to accept or reject a transaction for items with a high ticket price. “ReD Fraud Alert is a significant development enabling merchants and issuers to share information about suspicious fraudulent activity,” said Erika Gallo, director of global risk management for ReD. “The new service ensures that crucial transactional information can be disseminated quickly and effectively, protecting issuers and their customers, as well as merchants who have suffered liability for chargebacks, the loss of goods and association fines.” ReD said it conducted recent trials of the new service with a large customer and global card issuer and found it delivered a 43 percent reduction (by percentage of value comparing January 2011 to April 2011) in chargebacks. The new service works by ReD sending a daily automated file containing details of high-risk purchases to the issuer; if any suspicious activity appears on the customer’s account the issuer calls the cardholder to verify the transaction. Information is then automatically sent back to ReD to authenticate the purchase.