“False Positives” for Credit Card Fraud

September 5, 2013, Written By Lynn Oldshue

Ever get up to the checkout counter and swipe your credit card, only to have it declined for no reason? You know the card is good and you are well under your credit limit, but the credit card company is blocking the transaction from taking place.

This often leads to an embarrassing walk of shame or a call to the customer service department that can seem like a waste of time.

Why are you blocked in the first place? Because of a false positive of fraud on your account.

Banks try to protect their cardholders as much as possible, and that’s why they put a temporary hold on a card after suspicious charges take place on an account. For some reason, the bank believes your card has been compromised and they want to prevent any further unauthorized charges from occurring. It is a good practice for the sake of both the issuer and cardholder.

The problem is that many of the blocks are not justified, which can result in more annoyance than relief.

The CEO of Bellevue Mike Buhrmann recently wrote on his blog that some banks will have 40 times more false positives on credit card frauds than they do on legitimate cases.

Ellen Joyner, principal of marketing manager for security intelligence at SAS in North Carolina, says “Customers definitely have a right to be annoyed because it means they aren’t doing all they’re doing to avoid this.”

Fortunately, most of the top banks in the country are trying to transform their strategies to improve the system.

Identity theft has increased over the last few years, but that doesn’t make the “false positive” any less frustrating. But it would probably help if we, as cardholders, had more grace with the credit card companies when this occurs. After all, they are trying to protect us by doing this.

But be sure to keep some cash on hand for backup!



The information contained within this article was accurate as of September 5, 2013. For up-to-date
information on any of the terms, cards or offers mentioned above, visit the issuer's website.


About Lynn Oldshue

Lynn Oldshue has written personal finance stories for LowCards.com for twelve years. She majored in public relations at Mississippi State University.
View all posts by Lynn Oldshue