When your credit card company stops a thief from charging fraudulent expenses to your card, you’re thrilled. But what happens when they mistake you for the thief?
The worldwide cost of credit card fraud in 2018 was $24.26 billion — and in the U.S. alone 130,928 credit card fraud reports were recorded that year, according to DataProt.
Credit card companies are eager to stem the tide are continually beefing up their anti-fraud measures, relying on sophisticated computer software to flag suspicious transactions.
Trouble is, what looks like a red flag to a computer may just be you trying to make a mundane purchase.
Then, all of a sudden, your card is declined, leaving you red-faced and frustrated.
So what looks bad to your card company? Anything out of the ordinary.
“The credit card companies – Visa, Mastercard, American Express, Discover – all have their own proprietary technologies that look for anomalies in your spending habits,” said Robert Siciliano, an identity theft expert and consultant based in Boston.
Siciliano said each payment transaction is automatically analyzed for up to 200 different data points, everything from where you live to what you normally buy to how much you’re spending, to determine the likelihood that you’re the one actually making a particular charge.
If the analysis doesn’t add up, your card will be blocked and your next purchase declined.
How to handle a block
What triggers a block
Card issuers won’t go on the record about specific red flags – as Siciliano points out, “that’ll only give the bad guys an edge.”
But according to experts and hapless cardholders who have experienced a block, these six shopping habits may lead to hassles:
1. Shopping where you’ve never shopped before
“I’ve had calls from my card company saying, ‘We’ve detected unusual activity;’ it wasn’t unusual, but it was a different pharmacy than the one I normally went to,” said Denise Richardson, a certified identity theft risk management specialist and author of “Give Me Back My Credit!”
2. Making several purchases quickly
Janis Badarau, of Lavonia, Georgia, sometimes hits three grocery stores in a row to find what she needs and take advantage of sales.
But once she was so speedy that by the time she swiped her card at the third store, it was declined.
“I called the bank when I got home, and they told me that shopping at three supermarkets within an hour or so was considered ‘unusual activity,’” Badarau said.
3. Charging something small, then something big
Criminals sometimes test the waters with a stolen card by charging a tiny amount – say, a song on iTunes – before moving on to a triple-digit purchase.
That small-big pattern in your own buying habits may also result in a declined card.
4. Shopping away from your home base
That’s especially common when you’re moving.
“If my billing address is Massachusetts and I’m buying a washer and dryer in Idaho, that’s an anomaly, because why would I buy a washer and dryer in Idaho if I live in Massachusetts?” Siciliano said.
5. Charging travel expenses
On the road, any purchase from gas to restaurant meals can trigger a block. While that’s long been true for travelers abroad, it now happens domestically, too.
“Once my travel to Los Angeles flagged it, and I spent 20 minutes verifying transactions,” said Traci Coulter, who now lives in Los Angeles.
When she asked what caused the card to be declined, she was told, “a taxi, a charge at the airport, in-air Wi-Fi and a rental car hold” – all standard travel expenses.
6. Buying things in different geographic regions on the same day
During a cruise, Janet Gillis, of Tampa, Florida, used a card to get money from an ATM on the ship, then she later made a purchase in Belize. For the rest of the trip, her card was declined.
“Apparently, the ATM on board the ship is registered to a Miami location, and several hours later, I was purchasing something in Belize,” she said.
“To them, it looked suspicious because the transactions happened so close together,” Gillis said.
Online purchases to merchants in different parts of the world can trigger the same flag.
7. Dealing with billing issues
When Siciliano wanted to make an addition to an online purchase, he contacted the company, but the second transaction they tried to process was declined.
The card issuer “thought that the merchant was taking advantage of my card number.”
How to handle a block
When your card company suspects suspicious activity, sometimes you’ll get an email or a phone call asking you to verify a purchase.
- Carry backup credit cards: You’ll be able to offer another working card while you sort out the problems with the first.
- Keep your card’s contact info handy: “Have your credit card company’s toll-free number as one of your phone numbers in your mobile,” Siciliano recommends. The number is also on the back of the card, but if you have the telephone number on your phone, it is handy if your card is stolen or is lost.
- Tell your card company when you’re traveling: Advance notice doesn’t always keep your travel purchases off the “suspicious activities” list, but card companies recommend it. (Some card issuers no longer need this, as your phone lets them know where you are.) In the same vein, “give your creditor your cellphone number,” Richardson said. “If they only have your home number on file, that can be a problem, too.”
- Use a prepaid card: When you travel, a preloaded card gives you the convenience of credit without the hassles. (You do lose many protections, however, so that convenience comes with a price.)
- Sign up for text alerts from your issuer: Many card issuers offer a service in which cardholders can sign up to receive a text message within minutes of a flagged transaction, and often you can indicate by text whether you recognize the suspicious charge. If your text back that you made the charge, your account is updated and the transaction is cleared instantly.
- Provide a new address: When you move, quickly update your billing address so your card company recognizes your new home base.
- Ask for compensation: When Linsey Knerl’s card was erroneously declined, the store cashier refused to accept any other card, forcing Knerl to abandon a cart full of stuff. The Tekamah, Nebraska, woman wrote a letter to her issuer expressing her disappointment. “The credit card company actually gave me a rewards points bonus for my troubles – enough to buy a plane ticket the next time I traveled!” she said. Annoying as it can be to get blocked by mistake, remind yourself that it’s a sign that your credit card company has your back.