Project Title€¦ · Web viewSince I have worked daily with my stakeholder for 3 years, we talk frequently and deal with the fraud process daily. This is her primary job function

Running head: FRAUD EDUCATION FOR FRONTLINE STAFF AT AFCU 1

Fraud Education for Frontline Staff at AFCU

Becky Higgs

Arkansas Tech University

FRAUD EDUCATION FOR FRONTLINE STAFF AT AFCU 2

I. Student Information Name: Becky Higgs ATU Email Address: [email protected] Student T# 01197435 Current Employer: Arkansas Federal Credit Union Current Position: Payment Solutions Specialist

II. Project Site Information Organization Name: Arkansas Federal Credit Union Address (City, State, Zip) 2424 Marshall Rd Jacksonville, AR 72076

III. Stakeholders Information Stakeholders Name: Carol Honda Position/Responsibility: Fraud Specialist Email Address: [email protected] for Meeting with Stakeholders (Since I have worked daily with my stakeholder for 3 years, we talk frequently and deal with the fraud process daily. This is her primary job function so we have met officially twice to discuss my specific project. She was able to heed advice from her direct supervisor as to any outside commentary and was able to come up the main needs of the fraud process. She is passionate about our members at AFCU and understands that they feel the biggest pain point and that there is a great need for change.

ACKNOWLEDGEMENTS

Payment Solutions

LIST OF ABBREVIATIONS

AFCU Arkansas Federal Credit UnionNCUA National Credit Union Association


TABLE OF CONTENTS

Background......................................................................................................................................4

Purpose of Project............................................................................................................................5

Problem Identified...........................................................................................................................6

Research Methods and Materials.....................................................................................................8

Analysis and Findings..................................................................................................................... 9

Recommended Action Plan ...........................................................................................................16

References......................................................................................................................................20

Appendix A....................................................................................................................................21


Background

My current employer, Arkansas Federal Credit Union (AFCU), is a financial institution

that provides full service banking needs to its members. AFCU was originally founded in 1956

as Little Rock Air Force Base Federal Credit Union. It was started by seven airmen purposed to

serve base and civilian personnel and their families. AFCU is a federally chartered credit Union

headquartered in Jacksonville, AR and regulated under the authority of the National Credit

Union Association (NCUA). AFCU is the largest credit union in Arkansas with 14 branches and

32 ATM’s throughout the state, serving over 90,000 members worldwide. ("Diebold Integrated

Services(R) Streamline Arkansas Federal Credit Union's Operations," 2013)

Part of my role at Arkansas Federal Credit Union is to assist the fraud analyst in the

handling of disputed transactions. The fraud analyst is my stakeholder. She and I have come to

agreeance that front line training on Debit and Credit transaction disputes is the area that needs

most attention. Fraud is an evolving epidemic. Since our institution deals with Credit and Debit

cards for our members, we believe that it’s important for all parties involved to be on the same

page.

Many of us have felt the pain of dealing with identity theft and the dreaded realization

that your bank account has been depleted. AFCU is equipped to help ease the burden that many

of our members face on a daily basis. The key to helping our members is that our front line staff

must be fully engaged with the member and prepared to help. With that comes training and

education. I feel that this is currently an area of need.

Fraud is defined as intentional perversion of truth in order to induce another to part with

something of value or to surrender a legal right. ("Fraud | Definition of Fraud by Merriam-


Webster," n.d.) With fraud on a constant rise comes disputed transactions. While it may seem

like a foreign concept, duplicating a credit or debit card is quite easy. It’s a form of identity

theft that involves unauthorized use of another person’s card number with the purpose of making

purchases. When a debit card is fraudulently mimicked, the funds are used and drafted

immediately from your checking account. Fraud transaction are easily performed because these

types of transactions do not require a Personal identification number, or PIN.

The most popular methods of fraud we see are typically transactions that take place at

popular retailers such as Wal-Mart, Kroger, Walgreens, etc. A common trend is for fraudsters to

mimic your card and use the funds at these retails to purchase gift cards. This makes the

transactions untraceable while also guaranteeing the funds on a purchased prepaid card. Another

popular form of fraud occurs online. “We are seeing more sophisticated type of fraud moving

into the online environment,” said Erika Dietrich, global director of payments risk management

at fraud fighter ACI Worldwide. ("Credit-Card Thieves Move Online as Chips Thwart In-Store

Fraud," n.d.) Merchants in the United States are losing approximately $190 billion a year to

credit card fraud - much of it online. ("Forbes Welcome," n.d.) In recent years, there has been an

abundance of data breaches obtained at popular restaurant chains and stores. ("Restaurant

Chain’s New Slogan: ‘We Have the Breaches," n.d.) The disputes that we see can be true Fraud,

cardholder dispute for services/goods or even duplicate transactions. Another popular dispute is

non-fraud. Many members seek help from the merchants where they used their cards but are

often left with unanswered calls leaving them frustrated and without money.

With a growing company that has many employees who were hired ahead of a major

organization change, there is lack of sufficient training and education. We believe that an

overhaul of front line training can help ease our member’s worries.


Purpose of Project

The Purpose of this project is to streamline the process of disputing a transaction with

Arkansas Federal Credit Union. The number one access that our members have to their

immediate funds is through their debit card. When swiping your debit card, you’ve got

immediate access to your funds and the amount is withdrawn immediately. ("Using Debit Cards |

Consumer.gov," n.d.) With over 90,000 members with a plastic card in their hand, there is

bound to be fraud. If we can find a way to help ease the pain that our members feel when they

go through this process, then we can better serve our purpose.

Currently, AFCU received a monthly average of 40-50 dispute cases. These cases have

an average of 5-10 transactions per case and range anywhere from fraud, non-fraud or duplicated

transactions. Since we only allow members to dispute transactions no further than 120 days past

their statement transaction date, we turn away few cases.

When receiving a debit transaction that is claimed as fraud, we guarantee the funds to be

placed back in our members account within 10 days of received, written notification. We refer

to this process as issuing provisional credit to the member. This is credit that may be taken back

at some point during the process should the transaction turn up to be non-fraud. AFCU has a

contract with VISA to accept our disputed transactions to be researched. (Cluckey, 2016) We

allow VISA 60 days to return credit to AFCU once the transactions are deemed fraudulent. We

let these transactions sit on our books for 90 days during this process. Once the 90 day time

period has passed, our accounting department will write off the amounts that are not refunded by


VISA. This process is conducted on a monthly basis. The average monthly write off amount for

2016 was $71,198.

While the credit union is backed by CUNA, this is still reported as a loss. In an effort to

educate our front line staff on the importance of fraud disputes, we hope bring this number down

significantly.

Problem Identified

The problem is that the frontline staff does not have the proper knowledge, training, and

experience when it comes to handling member disputes. The issue is considered a problem when

the member does not understand the process. Members typically call our contact center or visit a

service center when they initially discover fraudulent activity on their account. When they

inquire, it’s quite easy to recognize that the transaction is in fact fraud, but the steps taken after

the identification of the activity is where disconnect is happening. Typically, our front lines

verify the activity, remove the unauthorized charges, and then close the plastic. This is typical

protocol for all card disputes. ("Reporting fraud - Security - Education - Think Mutual Bank,"

n.d.)

AFCU has policies and procedures for processing fraud disputes, however, these

procedures are not actively utilized. With a core conversation in the works, many employees

have been hire ahead in anticipation of high turnover during the conversion process. What we

are seeing is that these new employees are not receiving the proper training when it comes to

disputing transactions.

When our front line staff is not properly educated, this can cause great confusion for our

members. For example, a member notices a transaction on their account that they do not

recognize. The transaction is a charge for $145 for to a satellite company. They call or our


contact center to dispute the transaction. Our frontline staff helps to locate the transaction and

emails our member dispute paperwork to be filled out, signed and returned back to the credit

union. What our frontline staff failed to do, was ask the member if they had service with this

satellite company. They also failed to ask if they gave out their card information at any time to

this company. Now the paperwork has reached my department and we are left with questions

that should have been asked at the initial phone call. Our fraud analyst now reaches out to the

front line staff and asks them to reach out once again to the member with these questions. Now

the member is frustrated and just wants to know how to get their money back. This is a real life

scenario that happens every day. With fraud rising by the day, this could only keep slowing the

process as more and more cases keep rolling in. It’s exhausting for all parties involved.

Research Method and Procedures

I plan to use two techniques to come up with a solution to the problems that lie at AFCU.

My main method will be a survey. I plan to use survey monkey website to get honest,

anonymous answers form a selection of trusted employees. Since we have heard a few concerns

and issues that our frontlines have, I believe that it would the best source when getting real,

honest answers. Online surveys have become extremely popular, especially with our millennial

workforce. People are more driven and honest when they know their answers are anonymous.

Surveys typically come back quicker when conducted online and communicated through email

chains. (Chang, 2013) I plan to ask specific questions while also allowing for written feedback

and questions. Survey monkey is free which makes it more convenient from my perspective. The

survey can be filled out at the comfort and privacy of their own desks.


Since AFCU is comprised of a contact center and 14 services centers, I plan to survey at

least one employees from each location. These locations are scattered throughout the state of

Arkansas and have dealt with a variety of member disputes.

For my interviews, I plan to pick four to five employees who are at a leadership level and

above. I feel that these staff members field the most questions from their employees and more

than likely, they have the experience in filing member disputes. I plan to conduct these

interviews face to face and if necessary, and will travel to the service centers to see if any real

life actions can be notated. It has its natural basis in human conversation and allows me to adjust

the pace and control the questioning.

Analysis and Findings

When I began my research process, I thought about what members of our organization

deal with disputes the most. The obvious answer is our front line staff. We have roughly 85

staff that deal with our members either face to face, phone or via web chat. I was able to get 39

employees to take my survey. With receiving feedback from roughly half of our frontline staff, I

felt very confident in the accuracy of the pool that was surveyed.

I did not feel that I had many limitations to this part of my research. Since I work with in

a support office, I am able to speak with many front line employees on a daily basis. This helps

me to create a positive report with many of them. I was able to leverage a few of those

relationships and enlisted their help. This was a more positive experience that I originally

anticipated. The amount of participation I received was great.


The survey was sent through emailing using online software, “Survey Monkey.” I

included nine total questions. Six of them were multiple choice or yes/no questions and the final

three questions were fill in the blank. All questions were anonymous and optional.

For my first questions, I was not surprised by this answer. (See above chart) I asked

which type of dispute you would like more training in. A non-fraud dispute is perhaps the most

confusing to not only our front line staff, but also to our members. Of the 38 employees that

chose to answer this questions, 25 of them said they would like additional training for non-fraud

disputes. That is 66% of those surveyed chose non-fraud. If our staff isn’t comfortable having


the conversations with our members about non-fraud disputes then the member will not feel

confident in the process or in our organization. After all, they are trusting us with their money.

My next question asked how confident are you in explaining the dispute process to a

member? (See above chart) Only one surveyor said not confident but it was a tie between

somewhat confident and very confident. My assumption with this question would be that the

different between somewhat and very confident would be that the newer employees would

answer somewhat and more experienced employees would answer very. I had a total of 39

surveyors for this question.


The next question in my survey was asking which type of dispute they see the most of.

(See above chart) As I stated earlier in my report, debit transactions are real time. Money is

drafted instantly from your checking. We have far more members with debit cards than with

credit so naturally, we have more disputed transactions. Of the 39 surveyors for this question, 34

of them answered debit fraud. This was 87%.


Next, my question asked which method of training you would learn best from. This was

probably the most surprising of an answer that I received. In the three years that I have been

employed in the Payment Solutions department, there have only been a handful of people request

to shadow us. All 39 people answered this question and 54% said that shadowing our

department would best benefit them. I believe that a lot of our staff are hands on learners and

would like to see real life learning instead of a webinar.


The survey question above goes hand in hand with the previous question of which form

of training would suit you best. When I created this question I did anticipate the answer to be so

great. Of the 39 surveyed, 77% said that they would definitely be interested in shadowing our

department.


My last multiple choice survey question was asking if they agree with the dispute

process. The results were that 69% completely agree with the dispute process. I asked this

question because I really had no idea what anyone outside of my department thinks about the

process. I wanted to know is the process fair.

In my survey, I also included three fill in the blank questions. My first open answer

question asked to give their honest view of AFCU’s dispute process. I did not receive any

negative comments in this section. The main focus on this section was that more communication

be had regarding the status of the dispute. Some had nothing but positive things to say while


others mainly gave advice or pointers. Overall, communication was the biggest topic of

discussion in this question.

My next question asked the front line staff what type of resources would help them best.

Most answers were all over the board for this question. I saw comments regarding the difference

between fraud and non-fraud which was a popular answer listed above. There were several that

stated they would like additional information such as a reference to a quick guide, FAQ’s and

interview questions to ask the member. There were several that stated that the dispute form was

a bit confusing but the most common answer was hands on training. This is of no surprise since

the majority of the surveyors said they would like a shadowing opportunity. I found this open

ended question to be the most helpful and I feel like I received the most honest feedback.

My final survey question just simply asked for any additional information to be shared

regarding the dispute process. This section was the least amount of comments as only half of the

39 surveyed answered. This question was strictly open to voice whatever comments needed to

be made. I realize that this was a bit risky but I did not receive any bad news. This section was

used to somewhat brag on the Payment Solutions department so this was an easy read for me and

my stakeholder. The main takeaway that I had from this section was again, training on the

dispute form and better communication.

Recommended Action Plan

The recommended plan of action that I have come up with will be a simple process. As I

was surprised by the results of the survey, the number one request of the front line staff was to

have shadowing opportunities with Payment Solutions, specifically with the fraud analyst. There

was great frustration among the surveyors about which type of dispute to send in and

furthermore, how to fill out the form properly. Communication was the final takeaway from the


surveys. Front line staff has found that it’s hard for them to figure out the status of a dispute for

a member without having to call Payment Solutions for guidance. I have a plan to help alleviate

a lot of the pain points that were expressed in the survey.

The first part of my recommended action plan is to form a subsidiary group. This group

would consist of 16 employees, one from each service center and two from the contact center.

Since the contact center employs around 30 people, I feel it necessary to have two employees.

This subsidiary group would serve as a representative from Payment Solutions to their service

center. My plan would be a 15 week long training/education course. This would consist of a

two day shadowing opportunity for all service center representatives. Each member would get

two full days to shadow the fraud analyst. I would recommend two back to back days, but

whatever would work best for the schedules. I believe that two days would be a sufficient

amount of time.

The areas covered during this two day shadowing session would include a complete

overview of the fraud form. This would need to be covered in depth highlighting all of the

crucial areas. By taking an in depth look at the form, I believe that this would help to alleviate

the confusion that is coming from the familiarity of the form that was mentioned in the survey. I

believe the next important task to cover would be a list of questions to ask the member as a

reference guide. I believe it’s important to ask the write questions in order to process the

appropriate type of dispute. This could be compiled into a list to take back to their service

center. A visual of the dispute process from the Payment Solutions perspective will be crucial.

This will allow the front line staff to see the submission of the fraud form and understand why

the appropriate questions are so crucial. From my experience of shadowing opportunities in the

past, this is usually the “aha” moment. I also feel like it would be important for some hands on


opportunity during this part of the session. This would allow for the staff member to submit the

dispute to our vendor themselves and get a real time feel for the process.

I feel that it’s important for the representative staff member to come prepared with plenty

of questions. They will need to do their due diligence before coming. They need to find out

from their service center what information they want to know and what areas to focus on. This is

important because the representative will be going back to their service center with a full report

and essentially train their employees. I believe that Payment Solutions should compile a

PowerPoint presentation to be shared with the service center so that they have a highlight

reference of the material covered during the course of the two days.

I do not feel that any additional facilities or equipment would be required to make these

training sessions possible. I believe that, in order to get the most real time experience of the

fraud process, the shadowing opportunity needs to take place in Payment Solutions with the

fraud analyst. I do not feel that this would be a big burden on neither department of Payment

Solutions nor the service center whose representative is absent. I believe that if scheduled

appropriate with service center leadership, there should be no issues.

The cost of this training session would be minimal. Since we have three service centers

outside of the Central Arkansas area, there would be a need for hotel accommodations for when

the employees of those service centers come. This expense will need to be allocated to the

service center in order to benefit the needs of their branch. Payment Solutions will work closely

with service center leadership to schedule the dates and make sure that all representatives come

prepared are comfortable.

I believe that this plan of action will be most beneficial for all parties involved. Not only

will this help the service centers build a stronger report with Payment Solutions, but it should


help build confidence in front line staff. I cannot imagine that this would be a negative

experience for anyone. I believe that this is something that the service centers want and have a

great need for. By conducting the survey, we asked for their honest feedback. I believe that it’s

only fair to help educate. By conducting these shadowing sessions, I believe that it will also

build confidence within Payment Solutions to have in the front line staff. I believe that Payment

Solutions would also benefit by cutting down time on questioning that occurs on disputes that are

submitted today.

I feel that there is a sense of urgency for this training session to begin. While our

organization is currently undergoing a core conversion, I would recommend starting the training

in approximately three months. Since the time is not feasible now, I do not feel that senior

organizational leadership would back this training until the core conversion has been completed.

The estimated completion date is set to be May 1, 2017.

Once the 15 week training session has completed, I feel that the same survey should be

sent out with additional questions regarding the training that was given. I feel very confident in

this action plan and hope to see some very positive results.

References


Diebold Integrated Services(R) Streamline Arkansas Federal Credit Union's Operations. (2013, June 8). PR Newswire Association LLC [North Canton, Ohio]. Retrieved from https://libcatalog.atu.edu:443/login?url=http://libcatalog.atu.edu:2058/docview/1368684165?accountid=8364

Fraud | Definition of Fraud by Merriam-Webster. (n.d.). In Dictionary and Thesaurus | Merriam-Webster. Retrieved from https://www.merriam-webster.com/dictionary/fraud?utm_campaign=sd&utm_medium=serp&utm_source=jsonld

Cluckey, S. (2016, June 23). On the hot seat, networks streamline EMV cert, soften chargeback rules. ATM Marketplace [Louisville]. Retrieved from https://libcatalog.atu.edu:443/login?url=http://libcatalog.atu.edu:2058/docview/1799291194?accountid=8364

Using Debit Cards | Consumer.gov. (n.d.). Retrieved from https://www.consumer.gov/articles/1004-using-debit-cards

Reporting fraud - Security - Education - Think Mutual Bank. (n.d.). Retrieved from https://www.thinkbank.com/education/security/reporting-fraud.php

Chang, T. (2013). STRATEGIES FOR IMPROVING DATA RELIABILITY FOR ONLINE SURVEYS: A CASE STUDY. International Journal of Electronic Commerce Studies, 4(1), 131-140. doi:10.7903/ijecs.1121

Hannabuss, S. (1996). Research interviews. New Library World, 97(5), 22-30. doi:10.1108/03074809610122881

Credit-Card Thieves Move Online as Chips Thwart In-Store Fraud. (n.d.). Retrieved from http://finance.yahoo.com/news/credit-card-thieves-move-online-130000173.html

Restaurant Chain’s New Slogan: ‘We Have The Breaches. (n.d.). Retrieved from http://www.cutoday.info/Fresh-Today/Restaurant-Chain-s-New-Slogan-We-Have-The-Breaches

Forbes Welcome. (n.d.). Retrieved from https://www.forbes.com/sites/haydnshaughnessy/2011/03/24/solving-the-190-billion-annual-fraud-scam-more-on-jumio/#7cc7cc1c390e

Appendix A

https://www.forbes.com/sites/haydnshaughnessy/2011/03/24/solving-the-190-billion-annual-fraud-scam-more-on-jumio/#7cc7cc1c390e

https://www.forbes.com/sites/haydnshaughnessy/2011/03/24/solving-the-190-billion-annual-fraud-scam-more-on-jumio/#7cc7cc1c390e

http://www.cutoday.info/Fresh-Today/Restaurant-Chain-s-New-Slogan-We-Have-The-Breaches

http://www.cutoday.info/Fresh-Today/Restaurant-Chain-s-New-Slogan-We-Have-The-Breaches

http://finance.yahoo.com/news/credit-card-thieves-move-online-130000173.html

https://www.thinkbank.com/education/security/reporting-fraud.php

https://www.consumer.gov/articles/1004-using-debit-cards

https://libcatalog.atu.edu:443/login?url=http://libcatalog.atu.edu:2058/docview/1799291194?accountid=8364


https://www.merriam-webster.com/dictionary/fraud?utm_campaign=sd&utm_medium=serp&utm_source=jsonld

https://www.merriam-webster.com/dictionary/fraud?utm_campaign=sd&utm_medium=serp&utm_source=jsonld




Survey Questions:

1. Please indicate which type of dispute you would like more training in.2. How confident are you in explaining the dispute process to a member?3. Which type of dispute do you see the most of?4. Do you agree with the dispute process at AFCU?5. What type of resources would help you best?6. Would you be interested in shadowing Payment Solutions?7. Which method of training would you learn best from?8. Please give your honest view on AFCU’s dispute process.9. Please list any additional comments that you would like to give regarding the dispute process.

Appendix B


Interview Questions for Leadership:

1. What are the biggest pain points that you see from your employees about the dispute process?

2. Do you feel that your team is confident with having the conversations about disputes with the members?

3. Do you think they’d benefit from additional training and/or shadowing opportunities?4. Please share any other information.

Documents

Project Title€¦ · Web viewSince I have worked daily with my stakeholder for 3 years, we talk frequently and deal with the fraud process daily. This is her primary job function