Need Gas?

Let's say you are in need of gas and see two gas stations ahead. Both are advertising 87 Octane. However, Gas Station ABC is advertising at $4.00 per gallon and Gas Station XYZ is advertising at $2.00 per gallon. Question - which station do you choose?

I am a simple mathematician - but I might hit Gas Station XYZ and maybe buy some Lottery tickets with my savings!

However - I continue to be amazed by banks that are being asked to make this same decision to comply with FACTA - and yet they many times continue to choose Gas Station ABC. What I am talking about is how many banks are considering how to comply with FACTA Section 114B - which requires card issuers to validate consumer requested address changes. FACTA says that you can either send a letter to the former address of the consumer requesting the change - or used some other reasonable risk-based approach. More than not - banks are thinking of adopting the letter strategy at a cost of anywhere from $0.75 - $2.00 per address change. With 15% of consumers moving annually - this cost can add up to $0.30 in incremental cost per account holder each year.

Adopting a risk-based or information based approach can cost much less, while also providing protections that the letter strategy cannot. In a current economy that has banks scrambling to cut costs, Gas Station XYZ looks pretty good.