In the Wireless & Cashless module provided as part of Money & Markets Extra for the week ending Saturday, May 9, The Associated Press reported erroneously that the only bank using Zumigo’s credit card fraud protection services so far is Wells Fargo. It is the only bank to have publicly announced it is using Zumigo’s services. The company says the names of other clients are confidential.
A corrected version of the story is below:
Ever had your credit card go on a tour of Europe while you were at home in the U.S.?
Zumigo, a San Jose-based startup, aims to stop such obvious cases of fraud by matching the location of your smartphone to where your credit card is being used. It also scoops up credit history data from Equifax and account information from the cellphone provider to come up with a list of risk factors that can alert a merchant or bank to possible foul play.
For example, if the name on your mobile phone account matches the name on your credit card and your phone is within, say, a mile of the store that’s ringing up a receipt, then the risk of fraud is low. If your cellphone is thousands of miles away from where a purchase is occurring, that’s a red flag.
Zumigo has partnered with major cellphone carriers in the U.S. and Canada and is looking to work with more banks that are dealing with billions of dollars in fraud each year. Several financial institutions including Wells Fargo, an early investor, plan to roll out certain Zumigo services for things such as verifying location around ATM withdrawals.
Zumigo CEO Chirag Bakshi says its services could have helped shut down Apple Pay’s so-called “yellow path” vulnerability to thieves who registered stolen credit cards to legitimate iPhone 6s and then used the phones to commit fraud.