Neither snow ... nor rain ... nor credit card theft: postal inspectors and credit card industry team up to fight fraud

Article Abstract:

The theft of newly issued credit cards from the US Mail system became a major problem in the early 1990s. In 1992, fraud arising from mail theft incredulously increased by 98% over the past year. In response, the credit card industry partnered with the Postal Inspection Service to stem this tide of theft. Initially, it developed a program known as Stop Credit Card Abuse and Theft, which identified patterns of theft and fraud. The program was later replaced in July 1993 by a system known as Mail Theft Reporting System. Major credit card issuers provide data to this new program, which can be accessed by postal inspectors across the country. Aside from the program, postal inspectors in Washington, D.C., suggested the creation of the Credit Card Mail Security Initiative. Since its inception, this group has developed successful strategies for curbing the rise of credit card theft through the mail.

Software, Prevention, Credit card fraud, Crime prevention

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Marketing with neural networks ... or, "You gotta know the territory."

Article Abstract:

A major American credit card company started using neural networks in 1993 to select prospects to whom pre-approved account solicitations should be sent. As this card issuer has discovered, neural network technology can be applied in the identification of those individuals who would respond to solicitations as well as the prediction of how profitable the account would be. Just like a regression analysis, neural networks are also mathematically grounded but are compounded many times over. They uncover hidden relationships among variables and determines different patterns of values across a number of variables to give these relationships their due. As a result of the aforementioned credit company's usage of neural networks, its solicitation costs dropped by 19%, response rate increased by 30% and overall profit per mailing rose by 77%.

Electronic computers, Electronic Computer Manufacturing, Artificial Intelligence Systems, Usage, Computer networks, Marketing, Neural networks, Artificial intelligence

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Identity theft: yet another issue fueling the privacy debate

Article Abstract:

The rising incidence of personal credit information theft has spawned national privacy debates and placed the issue at the forefront of the legislative agenda for 1998. Fueling debates are the efforts of consumer and privacy advocates to call attention to the issue through publicity campaigns. Debates are also being fueled by the Federal Reserve Board's decision to study the impact of fraud on federally insured financial institutions and concerns about the impact of catalogs and sales letters from direct marketers on privacy. On the legislative front, federal and state legislatures are set to evaluate a number of proposals which include banning unsolicited credit card offers and allowing consumers to restrict access to their credit card reports.

Nonbank Credit Card Firms, Credit Card Issuing, Personal credit institutions, Evaluation, Cover Story, Nonbank credit card services, Consumer credit, Commercial crimes

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