My bank started declining my credit card Sunday. I called to ask what was going on. The chirpy customer service person said, “We have noticed suspicious activity on the account. We monitor for fraudulent activity for your protection!” My new card comes with a brochure that says, “You’re not responsible for any fraudulent charge, including online purchases. Guaranteed.”
Well, no shit, Bank of America. You are not monitoring for **my **protection, you are monitoring for **your **protection. I am not responsible by federal law! Of course it’s guaranteed! (If the card is physically lost or stolen and I report it then I could be liable for up to $50.) You make it sound like you’re doing me a favor.
You’re basically right. Banks do this sort of monitoring for their own protection. The thing is that they actually bear very little of the liability for the charges. In the majority of instances they pass along the liability to the merchants where the fraudulent use occurred.
This is a costly process for banks though so they find it in their interest to have monitoring programs.
My husband travels a lot for business. He always uses his Discover card for hotels, meals, etc. Without fail a day or two after he leaves town, I get a call at home that there is suspicious activity on our account. I tell them he is working out of town and the charges are being made are ok. Finally, I got pissed when they called and asked to speak to a supervisor and questioned why the f@$* they bother calling every month when they see he charges at least one week a month in a different city at a hotel along with meals and either an airline ticket or a train ticket to said city. The calls stopped after that, but maybe because I threatened that we would use another card if they kept bugging me every time a charge in a different city than the one we lived in came up.
I spent a few years as the manager of billing and payment systems for a domain name company. We had a terrible record of chargebacks because we were one of the earliest companies to do online real-time authorizations. Fraudsters would try to buy a domain name to test if a stolen card number would work. Visa fined us out the wazoo. So I know a lot about costs being shoved back to merchants. However, that was before the CVV codes; after we started using those we had the same liability as if we had a matching signature on a card-present transaction, which is to say, none.
I have had trouble in the past with this. Last August I bought plane tickets for my family to go to Quebec for vacation, and that triggered a blocked account. I buy vacation plane tickets probably averaging once a year and this is the first time this happened. Another time my account was blocked while we were in Italy. Now I call before a trip to tell them where I’m going. I call my bank more than I call my mother.
That must have been a long time ago. I think back when banks first started adopting CVV they probably offered zero liability to merchants so garner adoption. CVV in no way removes liability for merchants today. It will perhaps give a merchant a slightly favorable interchange rate but that’s about it.
But seriously, it happened on a weekend. It was probably flagged by a computer. Maybe they *would *have called him, during business hours on Monday and/or after human verification that the charges appeared fraudulent.
I started there in 1998 and I guess it was within one or two years that CVV came along. Visa’s policy was that the merchant was protected if we authorized with a CVV in a card-not-present transaction. We had to invent graphics that explained this to the customer because nobody had ever heard of it before.
The story is actually a bit more complicated. This first time, it happened Sunday night at 5:00, I called at 7:00. They told me it was indeed flagged by a computer. The person I talked to told me my Verizon charge (buying a phone) was flagged because they normally see charges to Verizon as regular monthly charges. I think she was making it up. They released the hold, and then I got a call from them the next morning. I ignored it because I thought everything was cleared up then I was declined at Home Depot. So I called back and they told me about three charges to online dating services that morning, none of which I had ever heard of. Those were the fraudulent transactions that caused the second hold, and caused the account to be reissued under a new number. And when I mentioned the Verizon charge, she said that’s not what triggered the hold.
Not true. As long as merchants follow their required steps, (get authorization, make sure card is current/not expired & signatures match) it’s not their liability. The authorization is the big one, because their being told the charge is good; otherwise, when they attempt it, charge s/b declined.
I did use words like “very little” and “majority”. There are steps merchants can take to eliminate their liability but they are very onerous and hard to complete. Its like trying to beat a speeding ticket.
In fact the are even businesses that offer to out-source the chargeback dispute process with the banks for a fee. They will do all of the back and forth with banks in order to get the merchants off the hook for the transaction. Some are pretty good at it for fraud chargebacks but in the overall environment of disputed charges (for any reason) we’re talking about “very little”.
Many merchants do not take even the most basic step of verifying a signature, which is their own fault. They either don’t know what their own contract says, or they don’t bother to train their staff. Famous internet story.
Chase once flagged my card on a Saturday evening when I tried to pay for a mattress at Macy’s. The annoying part was that they flagged it in the U.S., but I had just gotten home from a trip to Mexico, which I had told them about. I had a call from a human on my answering machine by the time I got home. At 8 pm on a Saturday.
I recently booked a hotel in South Africa with my Amex card and Amex called me within 30 seconds of the charge not going trough on the hotel’s website.
We use BoA and I’ve actually been really pleased with their fraud alerts. I have it set up to email me if a suspicious charge is detected, and then there is a website that you can go to to review the suspicious charges and flag them as “yes, that was me”, or “no, I don’t recognize this”.
We had this happen just the other week: there was a suspicious $1 charge to IMDB.com that got flagged, and an email came in just a few minutes after the fact, so we were able to shut down the account/request new cards online shortly afterwards.
Yes, we’ve occasionally had annoyances such as declined charges when traveling (or living abroad, when I had to call them up and yell at them a bit) but most of the time it’s come out in our favor.
There’s only one merchant who checks my ID when I buy something, and he’s a coin and precious metals dealer. He said that it’s the law that he has to check my ID when I buy something like a silver medallion. I don’t know if he’s BSing me or not, but I always let him see my DL, and I don’t give him any problems about it. I’m sure that it’s done this way to try to put barriers in place against money laundering.
But everywhere else…I can’t think of the last time that someone checked the signature on my credit card against the signature on the receipt.
Yeah. Every time I’ve had a bank notice unusual activity, they’ve put a hold on the card and not made ANY effort to call me (well, once they did - just once).
Interestingly, all of those were legitimate charges, though some certainly were odd enough (purchases from overseas companies) that I don’t blame the company for reacting. The time we were doing back-to-school shopping on Labor Day Weekend, however - at vendors we’d patronized before, and in amounts we’d spent before - was annoying as hell though. Who’da thunk that fraudsters shopped at Gap, Limited Too, Staples and JC Penney.
The standard merchant contract prohibits asking for ID. Think about it from Visa’s standpoint, they want to make it as easy for you, the consumer to use their payment method. If I need to pull out a card, & ID, & a DNA sample, I’m more likely to pay by cash or check (remember, the rules have been in place for years now). I don’t know much about the regulations of coin/precious metals dealers, but your typical mall merchant is full of crap when they say it’s required/the law. I know Visa (Visa, not the bank that issued you your card) will write the merchant a real nasty letter if you bring it to their attention. Continued noncompliance can result in the loss of the merchant being about to take the card.
Are you dead sure about this? It’s a bit like cutting off your nose to spite your face. “You’re making it difficult for people to use Visa at your location, so we’ll make it impossible for them to use Visa at your location. That’ll larn ya!” As if Visa customers get a discount for using Visa and don’t also have a Mastercard and/Discover. If I prefer a merchant, I’m going to that merchant. If I need to make a concession for payment method (bring cash, a Mastercard, whatever), it’s cool as long as I know up-front. However, if my payment method isn’t accepted everywhere I want to be, then I’m using something else.
