The Role Your Bank Plays in Protecting Your Finances

If you’ve ever broken away from your routine and used your credit card or debit card in a city or in a way that’s not your typical routine, you might have run into a bit of a problem. Your bank just might be assuming someone stole your card or is using your account in some other illegal fashion – and in its effort to protect you, it might decline to authorize the card swipe.

It’s actually a protective mechanism built into some banks and card companies, especially considering all of the hacks that have inundated banks recently. Freezing accounts and issuing fraud alerts have become a new reality, not only for the card companies and banks, but for you too since it affects your buying power. If they suspect that someone has stolen your credit card or card number, they may try trip up a would-be fraudster. It works often and has actually caught fraudsters before they can do too much damage, they also occasionally complicate your life as well if you’re trying to make a purchase.

Protecting Your Finances

So far have banks and credit card companies gone, you can’t get them to tell you exactly what kind of criteria they use to detect fraud. It’s sort of a craps shoot. There are a few things, though, that can play into your bank sending up a red flag or two. As mentioned, breaking from your routine and using your credit card in another city after you’ve used your card in your hometown for years could be a trigger.

Peculiar purchases of big ticket items is also a warning sign, especially if it looks as though you’re buying two or more 55″ screen televisions. Using your card to fill your car at a gas station you normally use and then an hour later, another authorization is sent through for another gas station that includes a fill-up. Of course, all of these might be perfectly innocent – you might decide to take the day off of work and go for a ride in the country. You might have bought yourself a big screen TV and realize your parents would love to have one for their anniversary, so you buy another one.

You might have followed your husband to the gas station, filled your car up and he swiped his credit card, kissed you goodbye and took off for a meeting in the next city, but then realized he too needed to fill his gas tank – these are all legitimate things that happen every day, but in an abundance of caution, your credit card company decides it’s too hokey and is far different from your usual buying patterns and opts to deny the transaction.

Usually, phone calls to your bank is all it takes to get them to authorize the purchase; however, in the meantime, it could be quite embarrassing. Unfortunately, getting the banks to rein in it could be challenging. Remember, when fraud hits, nine times out of ten, your bank or credit card company eats the losses. It’s part of its zero fraud protection that it offers to get you to use their credit cards.

Red Flags

And while we’re delving into a few of the red flags banks are on the lookout for, there are also red flags on your end as well, that you should be paying attention to. It can help you avoid fraud or at the very least, minimize it if your credit card has been hijacked because of a data breach or some other type of identity theft. Remember, too, that in 2010, 74 million Americans fell victim to some type of cyber crime. This, according to Norton Security, resulted in a massive $32 billion tab in financial losses.

Imagine being in line at Christmas, ready to check out with all of the toys and loot for the teenagers, the cashier totals it up and you swipe your credit card. A strange beep hits the swipe machine and all of a sudden, you hear the clerk say, “declined”. First you’re horrified, then embarrassed then alarmed because you know there’s no reason for your card to have been declined. What you don’t want to do is argue with the clerk – it’s only drawing more attention to yourself. Leave the loot, and head home to check your credit card account or bank account. There’s a good chance you’ve been hacked. Contact your credit card company to get to the bottom of it.

Strike Early

A few months ago, my phone began beeping with emails from my credit card company, alerting me of transactions that were going through at record pace. I panicked because I knew I wasn’t buying anything – I was sitting on my sofa catching up with last season’s episodes of Dallas. I called the credit card company immediately and they too began watching the transactions come in rapid succession. Turns out the hackers were making small purchases to see how far they could get without getting caught. Of course, the bank froze it all in that moment and my account was credited, but what’s worrisome is had I not been paying attention to the text alerts coming through my BlackBerry, they could have maxed my credit card out and instead of it being a quick phone call to the card company and them witnessing it in real time with me, it could have resulted in months of trying to sort through the aftermath. Moral of the story: pay attention, don’t ignore alerts and no matter if JR Ewing is about to get shot for the second time, stop what you’re doing and call the bank or credit card company. The sooner you put a halt to it, the better it will be.

Imagine being home on a Saturday afternoon and the phone rings. An abrasive woman begins telling you that you have financial responsibilities and you must catch up your credit card payments. Your first instinct is to play along – that baby sister of yours is always up to pulling pranks. Before you tell her that you’ll pay the credit card balance as soon as she admits to the fact that you’re actually the favorite child, you might want to hear the woman out – it might not be the baby sister. Someone else may be putting your identity to use. Ignoring the phone call or the message could mean bigger problems down the road. Get to the bottom of it so that you can go back to the business of one-upping your siblings. Find out the name of the credit card, who it was issued to, addresses – everything. Pull a copy of your credit report from all three credit bureaus and then notify both the credit card issuer as well as the collection agency that’s not begun to hound you. It’s frustrating, time consuming and certainly unfair. It’s also necessary.

Clearly, the best bit of advice is to stay alert, no matter how insignificant something might be. You never know when it’s going to escalate and it could result in a lot of frustration as you go about the business of cleaning the mess.

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