Navigating the Fraud Evolution: Inside the PULSE® Tactical Response

Each year, fraud ranks among the top priorities for issuers surveyed for the PULSE^® Debit Issuer Study. With millions of transactions scored daily in real time, PULSE understands the scale and complexity of this challenge. Data insights from PULSE help financial institutions detect trends early, benchmark against peers, and implement countermeasures faster and more effectively than if working alone.

Jim Lerdal, Executive Vice President of Operations with PULSE, has been at the forefront of efforts to combat fraud and safeguard the network. “PULSE’s strategy is focused on real-time intelligence, advanced technology, and a collaborative defense to mitigate risk,” Lerdal said. Drawing from his deep expertise and leadership in this area, this article explores how PULSE is addressing today’s most urgent fraud threats and laying the groundwork for future resilience.

Three pillars of fraud strategy

PULSE’s approach to fraud detection is structured around three critical areas:

1. Network Intelligence. Because PULSE sees transactions across thousands of issuers, fraud patterns can be identified before they become widespread. When a fraud scheme surfaces at one participant, the anonymized data can protect others across the network. Fraud-related chargeback data are also used to refine models, helping issuers to both reduce losses and lower costs for investigations and call centers.
2. Technology in Action. DebitProtect^® is a real-time detection platform leveraging FICO® Falcon® Fraud Manager’s latest capabilities. Processing decisions in 10 milliseconds, DebitProtect empowers issuers with seamless transaction security. DebitProtect Authorization Blocking, a service that includes all DebitProtect Standard features, is backed by analytics that continually evolve with the threat landscape. Custom rules use newly integrated data fields to help create highly specific fraud blocks and alerts.
3. People-Powered Innovation. A dedicated fraud-operations team combines deep industry knowledge with a passion for protecting issuers. The team works directly with hundreds of institutions to develop rules, implement changes, and respond rapidly to new threats. To identify bot attacks on payment systems, the team developed a new approach.

Innovations in fraud mitigation

Some of the most impactful fraud-prevention progress has come from new network-wide innovations that have proven effective at identifying and shutting down entire fraud vectors before they escalate:

• Merchant Volume Spike Detection: Sudden transaction surges are monitored at individual merchants, often a red flag for coordinated attacks.
• BIN Enumeration Attack Detection: Fraudsters use trial-and-error tactics to validate card numbers. PULSE systems identify and quickly neutralize these attempts.
• Brute Force Shutdown Rules: Leveraging dynamic hotlists of merchant names and IDs, attacks are shut down before widespread loss occurs.
• Purchase Return Pattern Detection: Unusual return behaviors are detected. These patterns may indicate abuse or account takeover attempts.
• PINless Blocking Enhancements: Our rule framework for PINless transactions continually evolves, adding new layers of defense where fraudsters once found gaps.

Collectively, these five targeted strategies have led to the identification of over 1.9 million compromised cards, more than 2.8 million suspicious transactions, and over $409 million in potential fraud stopped — all in 2024 alone.

Responding to emerging threats

Fraud is constantly evolving, with new tactics emerging regularly. One of the most concerning trends is smishing, where fraudsters use SMS messages to impersonate trusted sources and collect sensitive data. Often run by organized “fraud factories,” these operations use spoofed numbers, counterfeit websites, and social engineering to manipulate consumers into sharing personal information.

Even more sophisticated threats are being driven by generative AI, enabling deepfakes, voice cloning, synthetic identities, and phishing at scale.

PULSE’s response is layered and adaptive. This includes continued investments in advanced analytics, maintenance of agile fraud rules, and close partnerships with issuers to share intelligence and drive education. This layers down to Card Intelligence, a strategy that applies Debit Protect’s user-defined variables to flag first-time card usage, reversals, and other fraud-prone behaviors. This enhances both blocking and monitoring capabilities.

A shared responsibility

While PULSE brings powerful tools and expertise to the table, fighting fraud effectively requires collaboration. Issuers play a crucial role, educating cardholders, sharing real-time data, and aligning fraud-management strategies. Many institutions already operate their own fraud systems or work with processors. To complement this, PULSE adds incremental value within a broader fraud strategy that includes alert services and customized blocking solutions.

This community-wide approach to fraud mitigation is valuable as fraud becomes more like a business, with organized groups investing in their own research and development, tools, and distribution models. PULSE has a strong commitment to provide continuous innovation, strategic investments, and deep partnership across the industry. Together, it’s possible to outpace today’s threats and prepare for whatever comes next.