Notify Cardholders of a Loss Before They Notify YouIntroducing ERAD-INS, a unique solution that provides timely notification to financial institutions when their credit, debit or prepaid cards have been confiscated by a law enforcement agency – and often before those cards can be used fraudulently. With our early notification service, your institution can quickly identify stolen cards and immediately status them to prevent or stop financial losses.
ERAD-INS™ at a GlanceIdentify stolen cards and curb financial losses with our superior reporting solution.
The longer it takes for a financial institution to discover an account has been compromised, the more exposed it becomes. With average cloned card losses estimated at $3,500 per card, it doesn’t take many stolen cards to have a major impact on your bottom line. That’s where ERAD can help.
See below for more details about this groundbreaking solution:
ERAD-INS™Available to every U.S.-based financial institution, ERAD-INS (Issuer Notification Service) is a powerful fraud solution that quickly notifies financial institutions when their credit, debit or prepaid cards are confiscated by law enforcement. This superior reporting service allows issuers to identify stolen cards and mitigate financial losses. Participating financial institutions receive detailed reports with the relevant cardholder and law enforcement agency information they need to protect card accounts from additional fraudulent use. With ERAD-INS, your institution will receive:
Scheduled Secure FTP DeliveryMultiple update reports of cardholder information each day via secure FTP
Law Enforcement Agency Contact InformationContact information for the law enforcement agency that confiscated your institution’s cards
BIN DetailIndividual BIN registration detail plus brand, issuer name, client name and status for each confiscated card
Advanced NotificationSwift advanced notice of confiscated cards to reduce potential fraud losses
Improved Cardholder SatisfactionNotify customers of a card loss before they notify you! Offer the ultimate fraud protection to build a loyal customer base
Frequently Asked QuestionsDiscover how ERAD-INS™ can protect your financial institution from major losses.
ERAD-INS (Issuer Notification Service) is a unique fraud solution that quickly notifies financial institutions when stolen credit, debit or prepaid cards are confiscated by law enforcement. This superior reporting service allows issuers to identify stolen cards and mitigate financial losses.
Financial institutions receive detailed reports with the relevant cardholder and agency information they need to protect card accounts from additional fraudulent use. This gives issuers the opportunity to diminish financial losses associated with stolen cards. ERAD-INS is available to every U.S.-based financial institution.
This is where ERAD can help. Many times a card that has been confiscated by a law enforcement officer is still active and available to be used. Cards that have already been exploited by the criminal are generally destroyed or discarded. Because ERAD sees these cards prior to their illicit use, the issuer can take actions to block the card and avoid the financial loss.
Because a prepaid card is not linked to a bank account, they’re an easier, safer way for criminals to move and conceal large sums of money. They can load money onto the card in advance and spend it at almost any location in the world. The cards can be reloaded at almost any store or online through a website such as PayPal or Moneygram. Some prepaid cards also allow for direct deposit of payroll funds and tax refunds.
Using an inexpensive magnetic stripe reader/writer, a criminal can encode the account information from a stolen payment card onto practically any card with a magnetic stripe in less than a minute. These can be prepaid cash cards or gift cards – or even hotel key cards, driver’s licenses, and subway passes.
Using ERAD, an officer can swipe any credit or debit card and learn if the information on the magnetic stripe matches the cardholder name, card number and financial institution printed on the card. This intelligence will allow the officer to determine whether the card is legitimate, cloned or stolen.
If it turns out the card is stolen, cloned or otherwise fraudulent, ERAD quickly notifies the issuing financial institution, allowing them to mitigate losses associated with the stolen cards and proactively notify their cardholders. Participating financial institutions also receive daily reports containing the relevant cardholder and agency information they need to protect their card accounts from additional fraudulent use.
No. The magnetic stripe on a card contains the same information as what’s visible on the front of the card: name, card number, expiration date, and issuer information. ERAD security technology prevents law enforcement from gathering personally identifying information (PII) such as addresses and bank account information.
Multiple Appeals courts have ruled that there is no expectation of privacy in the magnetic stripe of a payment card because the cards are already used as a method of financial exchange. In other words, when a law enforcement officer swipes a card as part of a reasonable search, it’s no different – and no more invasive – than a retail clerk doing the same thing. (US v. Benjamin, 2014 WL 5431349, D.Neb. 14 and US v. Alabi, 934 F. Supp. 2d 1201 (D.N.M. 2013)
The 5th Circuit Court of Appeals ruled in 2016 that reading the data on a magnetic stripe is not a search.
The 6th Circuit Court of Appeals ruled that law enforcement officials can legally read the information on a card’s magnetic stripe because it should only contain the same information that is already visible on the front of the card.
The 8th Circuit Court of Appeals recently ruled for similar reasons that swiping or scanning a payment card is not a Fourth Amendment search and therefore doesn’t require a warrant.
No. ERAD security technology prevents law enforcement from gathering personally identifying information (PII) such as addresses and bank account information. ERAD only gives officers the ability to compare the information on the magnetic stripe of a payment card to the information visible on the front. ERAD can also determine the balance on prepaid and gift cards, but not credit cards or debit cards attached to checking accounts. Only financial institutions can link a debit card number to an individual’s checking account. Access to that information requires the owner’s consent or a search warrant.
If an officer identifies suspicious prepaid cards, ERAD makes it possible to temporarily freeze the balance and to secure the funds in a law enforcement bank account when they have the proper legal authority. All of this is recorded and documented as evidence for trial.
Only a judge can issue the order to permanently seize the funds on a card. This is known as criminal forfeiture and is only done as the result of due process in a court of law.
IRS, Last Updated August 3, 2017 The following examples of Identity Theft Investigations are written from public record documents on file in the courts within the judicial district where the cases ...
“Illegitimate cards:” Officials recover bundle of 1,300 gift cards; 700+ bought with stolen information
POSTED 10:15 PM, APRIL 15, 2017, BY DERICA WILLIAMS, UPDATED AT 10:27PM, APRIL 15, 2017 WAUKESHA COUNTY — Instead of a brick of drugs, stacks of gift cards possibly worth just as much were found...
POSTED 6:52 AM, APRIL 11, 2017, BY TRISHA BEE WAUKESHA — Waukesha authorities are investigating after 1,300 Walmart gift cards containing stolen credit card information were recovered. In Februa...
Carol Robinson, AL.com, March 2016 Three Cuban Nationals are in custody in connection with a credit card skimming/cloning scheme, Hoover police said today. The men were arrested March 21, said Hoov...
Department of Homeland Security, August 2015 During arrests of criminal couriers, law enforcement officers rarely find bundles of cash wrapped in rubber bands anymore. Instead, they find stacks of ...
Marc Santora, May 2013 It was a brazen bank heist, but a 21st-century version in which the criminals never wore ski masks, threatened a teller or set foot in a vault. In two precision operations th...
60 Minutes, Sept 2014 Con artists have been filing bogus tax returns and collecting millions. Steve Kroft finds out how far the scam has gone and why the IRS hasn’t been able to stop it. The follow...