Interview: Why Trailhead Credit Union blocked debit at Walmart

Bold move by Oregon-based credit union stems the rapid rise in fraudulent card activities

Due to high fraud one weekend at Walmart locations in California and Arizona, Trailhead Credit Union, a $110 million in asset credit union based in Portland, Oregon made the bold decision to stem the fraud by blocking their debit cards from being used at Walmart in those two states.

This decision was not made lightly; even though stores in their home state of Oregon were not blocked, Trailhead members vacationing or retired in those two states could be impacted.

ThePaymentsReview spoke with Jim McCarthy, CEO and Gail James, EVP about the decision process and its impact on their members.

ThePaymentsReview (TPR): Describe the steps leading to your decision to block debit transactions at Walmart stores.

TrailheadCU (TCU): First thing that Monday morning, we checked our reports from over the weekend and noticed about 50 fraudulent transactions, and all the transactions were in the $40-$60 range. We contacted our processor to confirm, and they showed that the fraudulent transactions had occurred at Walmart stores in Arizona and California. With the data in hand, we convened the senior team that morning and discussed the pros and cons, and made the decision to block the transactions. We requested our processor to change the appropriate authorization parameters to decline any further transactions from those stores, the request was completed that same day. Our marketing team first made sure that staff was notified, and that the call center was provided all the details; marketing then updated the website and reached out to members to notify them. We also ordered reissue of all cards that were counterfeited. This all happened that same day.

TPR: It sounds like you had procedures in place to deal with this type of situation ready to go. How did you execute so quickly?


continue reading »