Have you ever received a call from your bank or credit card company notifying you that your account was frozen because of a fraud investigation? Maybe your card was declined and when you called your issuer, they told you the frozen account was due to a credit fraud alert.
One in 10 Americans has been the victim of credit card fraud, with another 7 percent falling victim to debit or ATM card fraud, according to Statistic Brain. In fact, 40 percent of all financial fraud can be traced to credit cards. When you add up all credit card fraud across the world, the amount lost is $5.55 billion.
Banks and credit card issuers work hard to prevent theft, freezing accounts when they detect suspicious behavior. Sometimes, however, a credit card fraud alert can be the result of your own perfectly innocent shopping habits. Here are five ways you can trigger your own fraud alerts.
1. Make Purchases in a Strange Place
One of the easiest ways to end up with a frozen bank account is to swipe your card when you’re out of town. A transaction from a location other than where you live can be a red flag to the bank because card thieves will likely head out of town before using your stolen information to make a purchase.
Of course, there’s always the chance you’re simply traveling, but a freeze can be put in place nonetheless. If your bank doesn’t know your vacation plans, it will err on the side of caution. This is especially true when you’re traveling abroad and making purchases overseas.
2. Make a Small Purchase Followed by a Large Purchase
When thieves steal credit or debit cards, they often test their newfound buying power by making a small initial purchase. If that goes through, they move on to their true target, which is often an expensive, high-end item. Banks and credit card providers, therefore, are inherently suspicious when cardholders buy a pack of gum, for example, and then immediately buy a high-end barbecue grill. This is especially true when you’re making more than one large purchase.
3. Make Unusually Large Purchases
Banks and credit card companies use software and algorithms to detect fraud, but your personal spending habits likely play a role. If, for example, you typically charge $20 to $50 dollars a day on your debit card, your bank will surely notice when a $5,000 charge for a new jet ski comes through.
Banks are especially skeptical of large cash advances, gold and electronics purchases. Any purchase that is uncharacteristically large can act as a red flag to your bank or credit card provider, causing them to render your card useless at the register.
4. Buy Luxury Items That Are Irresistible to Thieves
Certain items are typically associated with card fraud, such as consumer electronics and jewelry, said Sol Nasisi, co-founder and president of personal finance site BestCashCow.com. Small transactions here and there — DVDs from Best Buy or earrings from Macy’s — probably aren’t going to sound off any alarm bells, at least at first.
But some luxury purchases are especially likely to send up red flags. Some specific high-end items are frequent targets for thieves shopping with stolen credit cards, according to MarketWatch; banks are on the lookout for purchases of Rolex watches, MacBooks, Louis Vuitton handbags and luxury hotel room stays.
5. Shop in High-Fraud Areas
Making several successive purchases in neighborhoods that are prone to fraud can trigger a freeze on an account that results in a card being declined, according to Forbes — especially with large purchases.
Credit card fraud and identity theft attacks are concentrated in some states and cities far more heavily than others, according to recent data from Sift Science. New York City’s Bronx and Brooklyn boroughs rank first and third, respectively, in credit card fraud. Miami takes the No. 2 spot with Philadelphia and San Jose rounding out positions No. 4 and 5. Alaska, Delaware, Mississippi and Nevada lead the way in credit card attacks by state.
Few things can ruin a shopping trip more totally than having your card get declined — especially when it’s not your fault. Luckily, a fairly simple remedy for this embarrassing and inconvenient annoyance is to call your bank ahead of time. If you’re traveling, especially overseas, or if you’re planning to make a large or otherwise peculiar purchase, letting your bank or credit card provider know beforehand can mean smooth sailing at the checkout counter.
If your card is declined, don’t panic. Just call your bank, confirm that the purchase was legitimate and ask them to remove the fraud alert.