[NA]credit card company alerts[NA]

Let'sgoflying!

Let'sgoflying!

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Dave Taylor
What is the reason we sign up for fraud alerts with our credit cards?

Twice now I've received a text or email from Amex saying there was a charge; both I knew were totally bogus.
Each time, I called Amex and I was told the charge is pending (as all charges are, in the first day or two) - and they cannot do anything. I was told both times the only thing you can do is dispute the charge after it has 'gone through'. I have disputed the first one successfully and will do so on yesterday's.

I guess I don't understand why they cannot block a charge when I am telling them it is bogus. The fact that the charge has not 'gone through' according to them means Amex has not approved it yet. So why not disallow it now, instead of making me do a paperwork dance later plus deal with the anxiety of the fraudulent $500 on my account for the next month? (If it near statement time, do I have to come up with the $500, or risk late fees and interest?)

Might go back to just dealing with things when the statement arrives.
 
One of life's great mysteries.....
 
Dump Amex.

I have had a great experience with citi double cash.
 
Only thing I can come up with is they have a list of long time vendors for which sales are pending, then approved.....and a list of newbie vendors who could be scammers. The latter sales go pending and the cc co will take action if we report them.

20 texts I could have avoided in the last week if I unsubscribe.
It's only protecting the credit card companies anyway, I have no liability in this!
 
Let'sgoflying! said:
It's only protecting the credit card companies anyway, I have no liability in this!
Click to expand...

For now. One of my many fears about the continuing erosion of consumer protections is the prospect of reversing this liability so it's on consumers and not card companies.
 
G-Man said:
For now. One of my many fears about the continuing erosion of consumer protections is the prospect of reversing this liability so it's on consumers and not card companies.
Click to expand...
I don't see that happening. Most would dump their cards. The cc companies know this
 
Let'sgoflying! said:
The fact that the charge has not 'gone through' according to them means Amex has not approved it yet. So why not disallow it now, instead of making me do a paperwork dance later plus deal with the anxiety of the fraudulent $500 on my account for the next month? (If it near statement time, do I have to come up with the $500, or risk late fees and interest?)
Click to expand...

Whenever I told Amex a charge is bogus, it was taken off my balance until the dispute was resolved.
The reason to get the alerts is to suspend the card early on and block further charges from being placed.
 
Morgan3820 said:
I don't see that happening. Most would dump their cards. The cc companies know this
Click to expand...
We might want to, and try to, but credit cards are a major aspect of American culture and commerce. Few places still take checks, and not sure how many of us are eager to carry as much cash as our credit cards represent. Try renting a car or getting a hotel room, etc., without a "major credit card."
 
Usually, Amex calls me. I got a call from them a few years ago, asking if I'd bought some airline tickets on Emirates. I told them I had not, that I hadn't bought any airline tickets, and if I had, it wouldn't be with Emirates, as they don't serve Atlanta. The rep told me she had a charge for forty one something thousand dollars :eek: on my card, and that she would decline it.

I guess the thief was going on the "go big or go home" principle.
 
G-Man said:
For now. One of my many fears about the continuing erosion of consumer protections is the prospect of reversing this liability so it's on consumers and not card companies.
Click to expand...

It's up to the credit card companies to secure their transactions. If they could let any transaction go through and expect you to pay it whether you made it or not, then the thieves would take over the charge networks and the entire thing would collapse in short order.
 
FormerHangie said:
It's up to the credit card companies to secure their transactions. If they could let any transaction go through and expect you to pay it whether you made it or not, then the thieves would take over the charge networks and the entire thing would collapse in short order.
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If I understand the system correctly, that's exactly what happens with Debit cards: it's on you to prove it is false.
 
G-Man said:
If I understand the system correctly, that's exactly what happens with Debit cards: it's on you to prove it is false.
Click to expand...

IIRC, I have a day or to to report it missing if I lose it, after that it's on me. I'm still not responsible if someone submits a fraudulent transaction through the automated clearinghouse and I dispute it within some time frame, I think it's within a few days of the next statement.
 
That seems to reverse burden of proof to be on the consumer, with a short time limit. Yeah, I hope that doesn't happen to credit cards.
 
No worries the same thing happened to me. Amex will reverse it after it's gone "live" and if there are any late charges or interest call them and ask those to be removed. They'll do it, at least they did mine.

As to why the wait, probably because the pending just means the payment processor is verifying you have the funds and it then has to go to a payment batch which occurs later. The processor is a third party, not your bank itself. The verification is no doubt automatic and the bank can't reverse it, it is nothing more than a declaration that you have sufficient available funds. During this time the demand is sent to the batch system by the processor to be compiled and because it's not within the bank, the bank can't do anything but wait for it to come through. Only then can it reverse it back out.
 
weilke said:
Whenever I told Amex a charge is bogus, it was taken off my balance until the dispute was resolved.
The reason to get the alerts is to suspend the card early on and block further charges from being placed.
Click to expand...

Exactly what is NOT happening here. Both things you mention. Mystery.
 
@Let'sgoflying! The times I have gotten contacted by a cc company (not AMEX) for a suspected charge and have told them it is bogus, they immediately cancel my card. No talking them out of it. They are protecting themselves. I have no idea what is going on with your AMEX.
 
I think the point LGF is trying to make is...why doesn’t the CC company simply not pay the bogus charge.
 
Very close; its more like why do they have an alert system which they ignore?
 
G-Man said:
If I understand the system correctly, that's exactly what happens with Debit cards: it's on you to prove it is false.
Click to expand...

Incorrect. And most States wouldn’t allow that anyway. There’s very few States where the fraud protection is any different between the card types. Because as dumb as politicians are, they all know exactly how many fraudulent transactions they personally have seen on their statements, too, and know the card companies have NO idea how to actually protect their broken systems.

You’re afforded the same protections with the debit card as the credit card for the most part. A large transaction can place a “hold” on funds in the account until you notify the fiscal institution that the transaction is fraudulent, but that’s about it.

So you don’t tie a debit card to an account with the rent money in it. Which is also easy to avoid.

But it is one “trap” someone who isn’t paying attention to how they work, can fall into.

The better the banking institution the sooner the transaction will be marked fraudulent and the sooner the hold is removed. I highly recommend Credit Unions where you aren’t just a number on a screen being read to by a robot in a call center.

Especially considering the vast majority of surviving banks after the housing crisis and chosen bailouts by their political buddies, are simply organized criminals with pretty marketing material. (The quinessential criminals being Wells Fargo, who not only didn’t deserve their bail out but also went on to create a corporate culture based on theft from their own customers. They should have already been dismantled and their executives in prison.)
 
P.S. AMEX has been going downhill for a while now.

The fiscal nail in their coffin was them losing their lucrative contract with Costco quite some time ago. They haven’t been the same responsive company since then.

Prior to that, they wouldn’t have given anyone any lip about pending or not pending transactions, they would have just taken care of it.

They’re not the company they once were.
 
Pending doesn't mean much. I've had AMEX put blocks in on unidentified purchase, however. I've been a "MEMBER SINCE" 1981. I've had a few bogus things showed up and AMEX has always dispatched them without question.

I did get the fun and games of setting off the fraud alert a few years back. I was in a liquor store in Fort Collins buying the alcohol for my daughter's wedding. The store manager says "American Express would like you to call them."

So I call. After some perfunctory identification it went like this:

AMEX: Are you in possession of your card?
ME: Yes. I'm trying to buy liquor for my daughter's wedding.
AMEX: Were you in Oshkosh, WI this morning and charged at the Hilton there?
ME: Yes, that was me.
AMEX: And were you in Broken Bow, Nebraska at noon and made a purchase at a restaurant there.
ME: Yep, that was me, too.
AMEX: And now you are in Fort Collins, Colorado?
ME: Yep.
AMEX: And you are in possession of your card?
ME: Yes, That was me in all those places. I have my own airplane.
AMEX: Oh.

Apparently, their computer can't deal with the fact that I could be in three cities without airline service in rapid succession.
 
Everskyward said:
@Let'sgoflying! The times I have gotten contacted by a cc company (not AMEX) for a suspected charge and have told them it is bogus, they immediately cancel my card. No talking them out of it. They are protecting themselves. I have no idea what is going on with your AMEX.
Click to expand...
This happened to me when I was on a business trip. Amex called about suspicious activity and said they would cancel. They allowed the charges I had made that day - we went through them one by one - but I had to complete my trip on another card. Inconvenient, but better than paying a stranger's $800 tab at a Miami sushi restaurant.
 
I have a few cards but use my Citi cash back for almost everything. My favorite feature is that I get a notification on my cell phone within 10 seconds of making any purchase.

And great cash back percentages. I make $50 to $70 per month with that card.
 
Currently, I get a text message and an EMAIL when they have a suspect charge. If I'm quick, I can deny/approve it before the merchant finds out but usually, I'm not that good. When it's legit, I can press OK and have them run it again.
 
I have my alerts set to send me a text and email on any 'card not present' and 'foreign' transactions. I am traveling in europe this week and the notifications are instantaneous. Most vendors here use mobile terminals that require a chip enabled card. There is never a need to give the card to a waiter or to use a swipe device attached to someones cellphone.
In the past, every suspect transaction that has happened fell into one or both of the above mentioned categories. I have not had the experience of amex wanting to cancel the card. It would be a pain in the neck as I have that card stored in a number of 'wallets' with the airline, hotels etc.
I have a Chase Visa for those vendors that don't accept Amex. I had forgotten to give them a travel notificaton so it promptly declined me at the first danish gas station where I had to use it ;-)
 
Wow. Last time I knew someone who had an AmEx card, Karl Malden was still doing their commercials.
 
Let'sgoflying! said:
What is the reason we sign up for fraud alerts with our credit cards?

Twice now I've received a text or email from Amex saying there was a charge; both I knew were totally bogus.
Each time, I called Amex and I was told the charge is pending (as all charges are, in the first day or two) - and they cannot do anything. I was told both times the only thing you can do is dispute the charge after it has 'gone through'. I have disputed the first one successfully and will do so on yesterday's.

I guess I don't understand why they cannot block a charge when I am telling them it is bogus. The fact that the charge has not 'gone through' according to them means Amex has not approved it yet. So why not disallow it now, instead of making me do a paperwork dance later plus deal with the anxiety of the fraudulent $500 on my account for the next month? (If it near statement time, do I have to come up with the $500, or risk late fees and interest?)

Might go back to just dealing with things when the statement arrives.
Click to expand...

Because AmEx sucks. Capital One, Chase, BofA... most of the major MC, Visa including Discover issuerers now will block a fraud charge which is pending automatically when it settles.
If you get two or three of them, they should automatically close the account and issue a new card account.

Tim
 
I think I might be able to answer OP's question.

I used to be a programmer for a major retailer and our department handled credit transactions. When you swiped your card at the cash register it passed through our systems to the credit card company's authorizers. Basically it sends your card information and the amount you're trying to buy. Then the credit card company would send back either that the card was authorized or it wasn't. Assuming it was we'd proceed with the transaction. BUT no money (or digital account balances if you prefer) actually change hands at that point. We would save all of our actual transactions into a "settlement file" which for us was sent to the credit card company nightly after midnight. Once they processed the settlement file was when they money actually changed hands. Why was it done this way? In certain cases the authorization and the settlement might not have been the same such as a voided transaction or certain types of purchases. Imagine a gas pump- the card authorization goes through before anyone actually pumps gas so you don't know how much they're spending until the transaction finishes. You actually see this going on more directly at self-serve avgas pumps.

We had some nights when something went wrong and we didn't settle the transactions that night and it got rolled into the next days. Some other companies might not do their settlements daily. Either way if you think about it from the card company's perspective they wouldn't know how much to refund your account until the settlement goes through which is, I imagine, why you have the "pending" transactions that they can't yet refund.
 
flyingron said:
Apparently, their computer can't deal with the fact that I could be in three cities without airline service in rapid succession.
Click to expand...

I've run into that before too. At first we thought the self serve pump just wasn't working. Couldn't figure out why until I turned my cell phone back on and saw all the voicemails, emails, and texts from my bank.
 
Everskyward said:
The times I have gotten contacted by a cc company (not AMEX) for a suspected charge and have told them it is bogus, they immediately cancel my card
Click to expand...

A couple of times over the years my credit card company called me to ask about a specific charge. When I confirm it was not me, they immediately close the account, open a new one, and overnight the new card to me.


Last night as I was gassing up my wife's car, the thought came to me that if I found a credit card on the ground, I could use it since I know the zip code. How does that make the card secure.??
 
Zeldman said:
Last night as I was gassing up my wife's car, the thought came to me that if I found a credit card on the ground, I could use it since I know the zip code. How does that make the card secure.??
Click to expand...
And consider all the times that we let a stranger take our card out of our sight when we are paying for a meal at a restaurant. Not uncommon or difficult for them to skim the mag stripe info or even just write down the number.

I know Dave started this with questions about card security from the issuer side. But there are many opportunities for a breach on the user side too. And many of those breaches would be classified as the user's own creation.
 
Zeldman said:
A couple of times over the years my credit card company called me to ask about a specific charge. When I confirm it was not me, they immediately close the account, open a new one, and overnight the new card to me.
Click to expand...

I had that happen five months in a row with a Barclays card. On the fifth time I called them up and told them to escalate to their internal security because there was no way someone at a gas station in California was guessing four new card numbers. The fraud had to be internal to their company and systems.

Which tells you something about Barclays systems without even setting foot in the door or doing an audit.
 
cowman said:
I think I might be able to answer OP's question.

I used to be a programmer for a major retailer and our department handled credit transactions. When you swiped your card at the cash register it passed through our systems to the credit card company's authorizers. Basically it sends your card information and the amount you're trying to buy. Then the credit card company would send back either that the card was authorized or it wasn't. Assuming it was we'd proceed with the transaction. BUT no money (or digital account balances if you prefer) actually change hands at that point. We would save all of our actual transactions into a "settlement file" which for us was sent to the credit card company nightly after midnight. Once they processed the settlement file was when they money actually changed hands. Why was it done this way? In certain cases the authorization and the settlement might not have been the same such as a voided transaction or certain types of purchases. Imagine a gas pump- the card authorization goes through before anyone actually pumps gas so you don't know how much they're spending until the transaction finishes. You actually see this going on more directly at self-serve avgas pumps.

We had some nights when something went wrong and we didn't settle the transactions that night and it got rolled into the next days. Some other companies might not do their settlements daily. Either way if you think about it from the card company's perspective they wouldn't know how much to refund your account until the settlement goes through which is, I imagine, why you have the "pending" transactions that they can't yet refund.
Click to expand...

I am still in the payment industry, I build/write those systems you interfaced with :D
AmEx does not actually have to refund the charge until after settlement. However, it is pure laziness on AmEx's part to not build the additional functionality to automatically chargeback or refuse the transaction once settled. AmEx is creating a bad user experience by notifying customers of potential fraud and not being able to address it until an unknown period of time has elapsed and the merchant settles the transaction. AmEx should either not notify the customer until settlement, block the transaction immediately is suspect, or notify the customer of a potential fraud transaction which is pending but allow the user to dispute it immediately.
The half a** solution they have implemented is the worst of all possible worlds.

Tim
 
steingar said:
My bank is so picky they thought my buying gas in Wisconsin was fraudulent.
Click to expand...

If you have a local or regional bank, especially one from rural areas where the local population does not wander very much, they have very tight fraud alerts based on geography.
This is generally much easier to manage than the more sophisticated fraud schemes the larger players use. Especially as you get into expert systems, and looking at behavior patterns, this stuff gets expensive to manage and tweak so the bank has to have a large volume to support it.

Tim
 
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