Experian, the global information solutions company, is leading the fight against Direct Debit Fraud, by enabling organisations to identify when a prospective customer is providing false or incorrect bank account details for automated payments.
The new system, BANK WIZARD Absolute is the only bank data verification solution that can confirm the existence of a UK bank account and its status, and match it to the correct owner.
BANK WIZARD Absolute combines information from Experian with the BANK WIZARD software from Eiger Systems, Experian's market leading developer of strategic payment solutions. This combination enables organisations to validate customers' payment details seamlessly at the time of application and when setting up regular or one-off payments to or from their customers, to ensure that payment details are absolutely correct at the time the transaction is set up.
"By implementing BANK WIZARD Absolute", says Jonathan Williams, Director of Communications and Product Strategy at Eiger Systems, "organisations can improve profitability by minimising transaction failure and payment fraud. This, in turn, significantly improves corporate risk management and customer satisfaction levels."
At present, when capturing a customer's payment details, most organisations separate different pieces of information for processing on different software, often using different suppliers. For example, a credit application is put through application processing software to be scored and a decision made. A separate process, using Eiger Systems' BANK WIZARD, is used to validate the format of their bank account details. Current rule-based validation technologies are limited in the efficiencies they can deliver because they cannot check that an account exists or that it belongs to the person seeking to make or receive funds. BANK WIZARD Absolute performs both in real-time.
Every year in the UK, 2 per cent of Direct Debits and Direct Credits fail or are applied to incorrect or invalid accounts. Repair costs alone to businesses in the UK are an estimated £3 billion annually. In response, some customers are driven to switching to alternative methods of payment that are more expensive to administer, such as cress credit cards, cheques or cash. Corporate reputations can also suffer and customer churn increase.
In addition, there is an unknown volume of Direct Debit and Direct Credit fraud, widely believed to be on the increase since the introduction of Chip and PIN, which has strengthened security for credit card and debit card transactions. Aware of potential weaknesses in the Direct Debit and Direct Credit schemes, fraudsters, posing as legitimate customers, steal goods and services either by using someone else's legitimate account details or by supplying fictitious account information that successfully passes standard modulus checks.
Jonathan Williams concludes: "BANK WIZARD Absolute can reduce significantly both transaction errors and payment fraud by providing certainty in real-time that customer-supplied bank account information is correct and relates to a real account, a specific individual and associated address.
"The launch of BANK WIZARD Absolute is a clear illustration of how the breadth and variety of data, products, knowledge and skills available from across Experian are being combined to the benefit to our clients across many different markets, enabling them to develop new, more profitable business strategies and take novel new approaches to customer acquisition."
Gareth Lodge, Analyst, European Payments for the TowerGroup believes that the industry needs a solution: "The payments industry is increasingly coming under attack from fraud. As the security for one payment method tightens the fraudster soon identifies the next easiest target. Banks must balance the often-conflicting requirements of simplicity and ease of use, against the need to counteract fraud such as phishing, ID theft and cookie-stealing malware. It is imperative that banks not only confirm the individual's identity and supplied account number, but also securely link these two pieces of information together."
BANK WIZARD Absolute is available as a service to BANK WIZARD customers on a per-usage licensing model.
 Assumes 2% of all DD and DC at a cost of £35 to repair