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How one credit union monitors and guards against fraud




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 When imagining what the scene inside a bank's fraud department looks like, the movie "Hackers" comes to mind. Computer screens everywhere, with folks surfing cyber space, parsing through "garbage files" and finding and destroying the enemy with futuristic plexiglass keyboards.

https://www.youtube.com/watch?v=8wXBe2jTdx4

But when walking through the Logix Federal Credit Union  in Burbank, California, the reality is very different. No futuristic gadgetry. Just tan walls, desktop PCs and a water cooler. Pretty standard office stuff.

Four people make up the  fraud management team at the credit union, which monitors transactions 24/7, for more than 126,000 customers.

Take Two reporter, Jacob Margolis sat down with Matt Overin, Manager of Fraud and Risk Management at Logix to get a behind the scenes look at how banks try  to protect their customers.

You can read excerpts from the full interview below, which has been edited for brevity and clarity.

Interview Highlights: 


"There are computer programs that do a lot of the stuff for us, so when we talk about credit card fraud, there's a system out there that looks at all the transactions. And looks for anomalies in those transactions and gives us suspect accounts to look at."

What alerts you to fraud?

"Let's say that you went to the gas station this morning and bought gas in Canoga Park. And then you went and bought gas again in Woodland Hills. People normally don't do that. They don't use two gas stations in the same day."

What are some of the ways people have their information stolen?

"I think a big way is skimming machines. Skimming devices on ATM machines and on gas pumps ...  as you swipe your card, it's a device on the outside or the inside of the machine that captures the card data and the PIN code as well. And then that data is transmitted by Bluetooth, usually, to a nearby car.  That person makes a fake card and starts using it right away."

So, they can go from right outside the gas station to spending with your card in how many minutes?

"15 minutes is the most to make a card with the card machines that are available these days."

That's the number one way?

"Data breaches of big companies that we've seen in the recent past is another way that card information can be stolen."

What happens when you have a big breach like that? At a place like Target or Home Depot... you know that all of this information has been gobbled up by someone who shouldn't have the information. What do you do?

"When we find out about a breach, a lot of the time it's after the fact. We generally will close our members' cards and issue new ones, so that their information won't be out there. But from the time that it takes for a company to notify the financial institutions that the card information has been breached, that card information has been for sale on the internet to anyone who wants to buy it."

How much  does it cost  the bank to  replace all of those cards?

"It's generally about five dollars a card that we're charged from our vendor..."

Is there a particular way that you're raising the anti against hackers, against people that are trying to steal information?

"Well, if you look behind you at the board, I have a list of fraudulent IP addresses that I've come across. So, people that try to apply for accounts  with us, if we find out that their application is fraudulent, we will mark down their IP address and look for it in the future."

This is part of Take Two's series on consumer security. Have been the victim of card fraud or identity theft? How did it impact you? How have you changed your spending or online habits to reduce the chances of it happening again?  We'd like to hear your story. Leave a comment on our Facebook page or here.

You can also read  previous installments of the series on identity theft, the impact of cyber crime on small business and a company that hunts down hackers