Trusko says NBPCA proactive in combating tax fraud

In March 20, 2012, testimony before a U.S. Senate subcommittee hearing on tax fraud, the Network Branded Prepaid Card Association's Kirsten Trusko informed senators of the role the association is playing in combating tax fraud perpetrated via prepaid cards. Trusko, the association's President and Executive Director, said when the NBPCA identified the connection between tax return fraud and general purpose reloadable (GPR) prepaid cards, "members of the NBPCA acted aggressively to address this problem."

The action took the form of the Prepaid Anti-Fraud Forum, established in 2011. The PAFF is an information sharing initiative where leaders of the prepaid card industry collaborate with law enforcement, establish best practices and host educational forums. At the start of the 2012 tax season, the PAFF issued a document designed to educate prepaid card businesses on fraud mitigation strategies, Trusko said.

"This confidential handbook has been shared with issuers, program managers and processors of prepaid cards," she noted. Information in the document is divided into four main categories that correspond to different stages on the transaction processing and monitoring chain: application, post-application, automated clearing house deposit and suspected fraudulent activity monitoring conducted post transaction.

Trusko said prepaid card businesses should pay attention to patterns of suspicious activity when GPR cards are activated and recognize "hot" ZIP codes and fraud trends in various regions of the country. "The industry efforts have so far resulted in over $1 billion of value loads to prepaid cards being returned to the IRS based on attempted fraudulent tax refunds," she said.

According to Trusko, the PAFF is working closely with the IRS Criminal Investigation Division, the Department of Justice and the FBI to "enable more effective information sharing to prevent the use of prepaid cards in tax refund fraud."

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