Fair Isaac's Fraud Management Tools and Best Practices Help Clamp Down on UK Payment Card Fraud

Business Wire, July 1, 2004

MINNEAPOLIS -- Recent Industry Survey Indicates First UK Payment Card Fraud Reduction in Eight Years, Highlighting Success of Comprehensive Approach to Fraud Management

In response to a recent survey by the UK-based Association of Payment Clearing Services (APACS) that revealed the first drop in UK payment card fraud in eight years, Fair Isaac Corporation (NYSE:FIC) today underscored its global leadership and successes in helping card issuers effectively reduce fraud by implementing advanced analytic solutions and industry best practices.

The APACS figures for 2003 attribute the five-percent reduction, primarily on counterfeit card fraud and fraud on lost and stolen cards in mainland Europe, to the deployment of sophisticated fraud intelligence systems. Over the past few years, Fair Isaac has worked with leading card issuers throughout the region to help them achieve the full potential of their fraud management programs. The company's global fraud reduction services include advanced analytic technologies, consulting services and fraud reduction partnerships.

"The APACS results are evidence of the positive impact that intelligent fraud management systems and optimized business processes have on areas where fraud poses a critical problem," said Chad Becker, vice president of Account Management, Fraud and Scoring Solutions at Fair Isaac. "Leading companies realize that implementing industry best practices endorsed by Fair Isaac fraud consultants and proven solutions such as Fair Isaac's Falcon Fraud Manager will substantially curb fraud and allow them to immediately reduce their losses. It is very rewarding to see that our fraud reduction efforts are paying off."

Several leading European financial services providers and seven UK issuers make up Fair Isaac's fraud management client roster, including Visa International European Union (Visa EU) representing 26 European countries, HSBC Bank plc, and Barclays Bank PLC, Europe's largest credit card issuer. Fair Isaac's proven track record with leading card issuers worldwide have helped detect 60-70 percent of issuers' fraudulent transactions.

Fair Isaac's industry-leading Falcon(TM) Fraud Manager solution and fraud consulting services have been instrumental in helping Barclays reduce fraud by more than 25 percent. Using Falcon to protect its credit, debit and corporate card portfolios from payment card fraud since 1997, Barclays recently extended its commitment to Falcon as its exclusive fraud protection solution for an additional five years.

"Barclays prides itself on being at the forefront of fraud management and protecting our customers from fraud," said Neil Wilson, head of fraud analytics, strategy, and policy at Barclays Bank. "We have recently implemented a comprehensive fraud reduction partnership with Fair Isaac which has proven successful beyond our expectations. We are very pleased with both the results and the experience of working with Fair Isaac consultants in dramatically reducing our fraud losses despite the challenging fraud trend the industry has experienced over the past years."

As the leading global fraud detection solution, Fair Isaac's Falcon minimizes fraud losses by predicting the likelihood that a transaction is fraudulent. It analyzes transactions in real time and generates recommendations for immediate action, which is critical to stopping fraud at an early stage, often before the cardholder knows that a card has been compromised through counterfeiting techniques.

While counterfeit card fraud and lost and stolen card fraud have seen a significant reduction, identity theft accounted for the largest percentage increase of 45 percent, according to the 2003 APACS figures. Continual development and review of fraud prevention methodologies and techniques are vital as fraudsters become more savvy, dangerous and numerous.

Fair Isaac has provided detection and management of identity fraud in the form of application and subscription fraud for many years, and is now leveraging its core competency in fraud management and global analytic leadership to provide the industry's first integrated identity theft protection solution. Through access to cross-industry consortium data, patented modeling and profiling technologies and innovative investigative techniques, Fair Isaac's new identity protection solution enables credit grantors to quickly detect application fraud and account takeover.

About Fair Isaac

Fair Isaac Corporation (NYSE:FIC) is the preeminent provider of creative analytics that unlock value for people, businesses and industries. The company's predictive modeling, decision analysis, intelligence management, decision management systems and consulting services power billions of mission-critical customer decisions a year. Founded in 1956, Fair Isaac helps thousands of companies in over 60 countries acquire customers more efficiently, increase customer value, reduce fraud and credit losses, lower operating expenses and enter new markets more profitably. Most leading banks and credit card issuers rely on Fair Isaac solutions, as do insurers, retailers, telecommunications providers, healthcare organizations and government agencies. Through the www.myFICO.com Web site, consumers use the company's FICO(R) scores, the standard measure of credit risk, to manage their financial health. For more information, visit www.fairisaac.com.