Project Title - Rebecca Higgs



Fraud Education for Frontline Staff at AFCUBecky HiggsArkansas Tech UniversityStudent InformationName: Becky HiggsATU Email Address: rhiggs1@atu.eduStudent T# 01197435Current Employer: Arkansas Federal Credit UnionCurrent Position: Payment Solutions SpecialistProject Site InformationOrganization Name: Arkansas Federal Credit UnionAddress (City, State, Zip) 2424 Marshall Rd Jacksonville, AR 72076Stakeholders InformationStakeholders Name: Carol HondaPosition/Responsibility: Fraud SpecialistEmail Address: chonda@Strategy 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. ACKNOWLEDGEMENTSPayment Solutions LIST OF ABBREVIATIONSAFCU Arkansas Federal Credit UnionNCUA National Credit Union AssociationTABLE OF CONTENTSBackground4Purpose of Project5Problem Identified6Research Methods and Materials8Analysis and Findings..................................................................................................................... 9Recommended Action Plan ...........................................................................................................16 References20Appendix A21BackgroundMy 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 ProjectThe 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 | ," 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 IdentifiedThe 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 ProceduresI 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 FindingsWhen 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 PlanThe 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. ReferencesDiebold Integrated Services(R) Streamline Arkansas Federal Credit Union's Operations. (2013, June 8). PR Newswire Association LLC [North Canton, Ohio]. Retrieved from | Definition of Fraud by Merriam-Webster. (n.d.). In Dictionary and Thesaurus | Merriam-Webster. Retrieved from . (2016, June 23). On the hot seat, networks streamline EMV cert, soften chargeback rules. ATM Marketplace [Louisville]. Retrieved from Debit Cards | . (n.d.). Retrieved from fraud - Security - Education - Think Mutual Bank. (n.d.). Retrieved from . (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.1121Hannabuss,?S. (1996). Research interviews. New Library World, 97(5), 22-30. doi:10.1108/03074809610122881Credit-Card Thieves Move Online as Chips Thwart In-Store Fraud. (n.d.). Retrieved from Chain’s New Slogan: ‘We Have The Breaches. (n.d.). Retrieved from Welcome. (n.d.). Retrieved from ASurvey Questions:Please indicate which type of dispute you would like more training in.How confident are you in explaining the dispute process to a member?Which type of dispute do you see the most of?Do you agree with the dispute process at AFCU?What type of resources would help you best?Would you be interested in shadowing Payment Solutions?Which method of training would you learn best from?Please give your honest view on AFCU’s dispute process.Please list any additional comments that you would like to give regarding the dispute process. Appendix BInterview Questions for Leadership:What are the biggest pain points that you see from your employees about the dispute process?Do you feel that your team is confident with having the conversations about disputes with the members?Do you think they’d benefit from additional training and/or shadowing opportunities?Please share any other information. ................
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