The new, automated system, supported by Actimize Inc.'s analytics technology, helps mitigate risk and reduce fraud for banks and consumers before it happens, which makes paying bills online even safer for consumers and fighting crime more efficient for financial institutions.

Over the years, CheckFree has established a cooperative network of security, privacy and law enforcement contacts across more than 1,700 consumer provider clients, billing organizations and merchants across various jurisdictions. CheckFree FraudNet is an automated fraud detection and case management system that is designed to be a collaborative solution. The service combines CheckFree's cumulative knowledge of payment patterns and a sophisticated analytics engine to help financial services clients detect and stop unauthorized payments before they are completed. CheckFree FraudNet is powered in part by a sophisticated analytics engine from Actimize, the leading provider of enterprise technology solutions for mitigating operational risk, using real-time analytics.

CheckFree FraudNet is proving very effective at the detection of possible fraudulent transactions through the automation of fraud prevention, detection and case resolution processes that have been conducted successfully for many years by CheckFree Fraud Control Services. Not only does CheckFree FraudNet have the potential to significantly reduce losses for participating banks, but the data on attempted fraudulent transactions can provide forensics to law enforcement to help catch and prosecute fraudsters. Fraud rates for CheckFree's electronic billing and payment have historically been extremely low due to stringent policies and practices already in place. Now, as the continued adoption of electronic billing and payment increases volumes, these processes will be more fully automated, monitored and able to stop fraudulent transactions before they occur.

"CheckFree is committed to continuing to make online billing and payment safer than offline. Our commitment to quality includes bringing our consumer service providers, billers and their customers the highest possible levels of security and privacy protection," said Matt Lewis, executive vice president and general manager of CheckFree's Electronic Commerce Division. "CheckFree FraudNet is one more reason why receiving and paying bills online is safer and more secure than receiving paper bills and mailing signed paper checks -- because CheckFree and its financial services clients will be proactively detecting and preventing fraud."

How it Works

As the leading provider of electronic billing and payment services to more than 1,700 consumer service providers, CheckFree is in a unique position to help its customers fight fraud. The CheckFree FraudNet system adds the ability to detect rules-based anomalies and place payment transactions into queues for further examination by fraud prevention teams at either CheckFree or its financial institution clients.

The Actimize analytics engine issues alerts when suspicious transactions or fraud patterns are detected. A "Yellow Alert" transaction enters a queue as it alerts fraud prevention teams to examine the payment that is ready to be processed. The "Red Alert" signals a high likelihood of fraud and holds the payment for review by a Fraud Specialist. If the payment is cleared as valid, the transaction is processed with a negligible delay. This new automation is designed to take the level of quality of previous processes to the next level of detection and prevention as consumer adoption continues and monthly payment volumes are anticipated to increase. As the CheckFree FraudNet engine gathers increasing amounts of data from the millions of transactions CheckFree processes daily, the intelligent system continues to learn and continually gets "smarter." These ongoing improvements will deliver shared benefits to all CheckFree customers who utilize the service.

CheckFree FraudNet monitors every bill payment transaction that appears on consumers' accounts at member banks and matches them against pre-established rules developed through experience. Consumers who pay bills online will not notice the review process or longer payment times unless a transaction is determined to be potentially fraudulent. The alert system allows the fraud teams at a bank or at CheckFree to investigate and resolve Red and Yellow Alerts quickly and more effectively manage their time and case loads.

"By moving the fraud prevention and detection system to an automated process, we're finding constant improvement in the rates of detection," Lewis continued. "As we move forward, the CheckFree FraudNet system will continue to learn from a high volume of growing transaction data to deliver shared benefits to all participants. The rule sets will become increasingly advanced and when leveraged in conjunction with our wealth of transaction data, will allow us to prevent more fraudulent transactions while reducing the number of false fraud alert cases that are worked by security teams."

CheckFree FraudNet Alliance

Every financial institution that leverages CheckFree FraudNet technology becomes part of an alliance that leverages a wealth of experiential history. Each member also has the ability to manually enter information to continually enhance the effectiveness of the tool, reduce cross-industry response times and potentially fight crime as an industry. CheckFree FraudNet accumulates a growing knowledge base of patterns and individual fraudsters for continual refinement to rules sets and analytics. This collaborative environment is designed to allow financial institutions to build on the effectiveness of best practices in fraud prevention and detection. These benefits are quickly realized by financial institutions through a turn-key implementation that eliminates development costs and provides a live system within days.