No one wants to be the bearer of bad news, but financial institutions can’t avoid this role. When fraud happens, you have to alert your customers. The way you communicate with your customers about bank fraud can have a direct impact on your bank’s reputation and its relationships with clients.
Does your fraud communication strategy protect your reputation? Does it nurture your relationship with your clients? Or does it hurt your reputation and your relationships? To ensure you’re taking the best approach possible, keep these tips in mind as you shape your communication strategy.
1. Reach out to the victim as soon as possible.
Don’t wait when alerting your customers about fraud on their accounts. Make sure that you reach them as quickly as possible. Ideally, you should have a dedicated process for contacting customers, but you may need to use different communication methods depending on the extent of the fraud and customer preferences.
For instance, if you need to contact a business customer after you’ve discovered thousands of dollars of fraud on their account, you may want to call them and speak with someone directly. On the other hand, if you have detected a potential case of fraud on an individual’s account, you may want to send them a text to check if the purchase is fraudulent or legitimate.
2. Keep customer contact information up to date.
If you don’t have accurate contact information for your customers, you won’t be able to contact them when you see cases of real or suspected fraud. This doesn’t just hurt your customers. It can also end up hurting your financial institution.
Imagine that someone is making purchases in another country using your customer’s card. The purchases are outside of the customer’s usual patterns so you send them a text to see if the purchases are legitimate. However, you don’t have the right phone number so they don’t get the message.
You don’t know if fraud is happening or not so you shut down the account. Your customer is, in fact, making purchases in another country, but as soon as you shut down their card, you stop them from enjoying their vacation. At this point, will they be grateful that you were looking out for them? Or will they be annoyed that their card just got declined while they were trying to buy lunch in Italy? In most cases, it’s the latter. Customers don’t respond well to friction, and they will find another bank when it happens.
There are all kinds of ways to reduce friction in the customer experience, but in this particular instance, it’s as easy as prompting your customers to update their contact details on a regular basis. Make sure you know how to reach your customers and how they prefer to be reached.
3. Use the right tone.
Money is emotional at the best of times, and it’s particularly emotional to lose money. When notifying your customers about fraud or data breaches, take the right tone. You want to inform them, without scaring them. You also want to be upfront but sensitive about their potential losses.
In many cases, customers help to facilitate bank fraud. For instance, they might fall prey to a phishing scam and give a thief information that allows them to access their account. Or they may fall for a cashier’s check scam or a love scam.
It is devastating and embarrassing to realize that you have fallen for a scam. Make sure to use a kind and empathetic tone when notifying your customers about these fraud cases.
4. Be transparent.
Trust is critical for consumers. They want to trust the brands they use. This is even more true when it comes to financial institutions. If you played a role in the fraud or data breach, admit that you made a mistake.
Don’t overshare details, but also don’t try to hide or pretend that you didn’t do anything wrong. Transparency can feel counter-intuitive when you’re trying to get customers to trust you, but it’s almost always better than the alternative. Admit your mistake. Then, explain what you’re doing to rectify it.
5. Offer information on how to set up a fraud alert with the credit bureaus.
Once someone becomes the victim of fraud, they are likely to face multiple fraud attempts. Tell your customers how to set up fraud alerts with the credit reporting bureaus. If someone tries to open an account or borrow money when a fraud alert is in place, the creditor must contact the applicant directly. Then, the creditor will verify the applicant’s identity and the legitimacy of the request before moving forward.
This provides an additional layer of protection for your customer, but it also safeguards your reputation. As a financial professional, you deal with fraud every day, but your customers typically only deal with fraud when it happens to them. They don’t know what to do when they become a victim of fraud.
If you send them in the right direction, they will be grateful for your help. They will also see you as a trusted advocate who cares about what happens to them. In contrast, if you don’t try to help them, they will see you as a cold institution that’s not concerned about them as an individual. Let them know about fraud alerts or any other products, services, or practices that can help to protect them in the future.
You need to be prepared to talk with your customers about fraud, but even more importantly, you should actively try to reduce the risk of fraud. While post-fraud communication is important, it’s even better to just avoid fraud in the first place. To do this, you need anti-fraud tools that help you detect but also prevent fraud.
Ready to learn more? Then, contact us today. At SQN Banking Systems, we offer fraud protection tools and services. We can assess your current anti-fraud strategy and help you develop a plan to move forward.