Lessen the Impact of Card Fraud with ICBA Payments’ Fraud Loss Protection Plan

Card fraud losses constitute a significant percentage of a bank’s card program’s costs. In fact, according to the Nilson Report, card fraud accounted for $33 billion in losses worldwide in 2022, with $13.6 billion of those losses occurring in the United States. While not all of them will fall back on the bank, a large portion will. So, it stands to reason that community banks need additional support to ensure against this threat.

Enter ICBA Payments’ Fraud Loss Protection Plan (FLPP). For more than 30 years, we’ve offered this program to ICBA Payments clients, but in 2024, for the first time, we’ve opened it up to all ICBA members in good standing.

Coverage

As the only fraud loss coverage plan designed specifically for community banks, we have tailored FLPP to the top fraud challenges community banks are facing in the debit and credit card space. Specifically, FLPP serves as a proven solution to help banks recuperate their fraud losses from:

• Lost cards

• Stolen cards

• Cards not received in the mail (NRI)

• Counterfeit (including skimmed counterfeit cards)

• Account takeover card loss (including identity theft, phishing, pharming, and vishing)

• Card Not Present or e-Commerce fraud

• Friendly fraud

• Virtual cards

In addition, FLPP acts as a complement to any existing card protection programs community banks may have with their processors or core providers. In many cases, ICBA Payments’ clients have selected to employ both solutions to help bolster their fraud protections.

Results

In the last five years alone, the FLPP has reimbursed upwards of $3.5 million in fraud losses and has paid out on 1,940 fraud claims, with 70% of reported losses stemming from credit card fraud and 30% from debit card fraud. Ultimately, these paybacks return funds into the budgets of community banks, helping them to better serve their customers and communities.

FLPP provides a safeguard that not only supports community banks financially, but it also helps you maintain your card programs and reputation as secure financial services providers. As the Federal Reserve Bank of Atlanta noted in its 2023 Survey and Diary of Consumer Payment Choice, “Despite the increase in reported credit card fraud, consumers rank credit cards as superior to all other payment instruments for security... They have ranked credit cards best for security in every year since 2017.” Those findings mean that when a community bank is able to quickly address a fraud situation with clients, confidence in the bank and the card solution drives ongoing loyalty and card use.

Safeguarding your institution

In today’s environment, balancing card program risk and reward has never been more important. While fraud threats are always a consideration, properly protecting your card program will provide a buffer against them. So, if you aren’t already an FLPP client, we encourage you to reach out to the ICBA Payments team today and join the more than 350 community banks who are already taking part in FLPP.

Or, if you are a participant, share your experiences with another ICBA member who may benefit. Because participating may just mean the difference between taking a full-hit fraud loss and a partial one. The latter will have a softer impact on your financials due to the protections you have in place.

For details on FLPP pricing, implementation, and more, visit the ICBA Payments website or contact the Card Risk Department at FLPP@icba.org.