How do they know?

[b4freedom]

My credit card called to tell me that they are closing the account because two charges were probably fraud.

How do they know?

About a year ago, a coworker comes into work. It's a normal work day. A few meetings in the morning, she goes to lunch, comes back an hour later, goes to another meeting, comes back and gets a call from the credit card company. "Did you make a purchase at walmart at around 12:15 today?" "No!?" She responds. Turns out, her secretary stole her credit card when she was in her first meeting. She then went to walmart at lunch, purchased a bunch of stuff, and then returned the credit card back into her purse when she went to the second meeting. Within an hour after the phone call, they had someone showing her photo's of people from walmart to see if she could identify anyone.

How did they know?

[sweeps]

Wow that's an interesting story. Maybe the secretary acted suspiciously and the cashier reported her? Or the purchases were suspiciously large (by Walmart's standards) and the CC company's computers automatically flagged the transactions?

they also use time and location patterns that are out of the norm.

my Cap One card on more than one occasion has been denied and when I arrived home I found a voice mail (I don't use a cell phone) from them apologizing and explaining they were concerned something was out of the ordinary. the time stamp is almost exactly when the transaction took place.

I assume if I had a cell phone and listed it as my primary contact number they would have called me on the spot to let me know what's up, a service I appreciate. it's one of the reasons I've kept that card.

but it's also a good argument to have a second credit card, something I advocate but as of yet haven't gotten around to.

[MonkeyMama]

Chase is really bad about denying charges for those reasons, but I don't think they have ever called.

An interesting story, my dh just bought a PS3, which isn't necessarily that out of the ordinary - he buys a lot of computer and electronic gadgets. They denied the charge with no explanation. So he pulled out a Chase card he had not used in at least 5 years (the backup we carry because of how many times we were denied for this reason in the past - we have only been using Chase again for a few months so haven't used a backup card in years). Anyway, a card with no purchase in years, same company, goes through. I am not even sure we have used it since we moved to a different city.

Though I appreciate them trying to prevent fraud and all, the system has some flaws - LOL. I just can't believe they would deny the first charge but not the 2nd. But anyway, when he got home he called and they told him the first was just denied because it was out of the ordinary. Well yeah, does no one save up for these big purchases? I don't buy a PS3 every month. Now I remember why we dropped them though, it is impossible to make a purchase over $100 without a lot of hassle...

I think the thing is Chase denies and waits for you to call. Was the Wal-Mart purchase big? Could be why - if it was just a bigger dollar amount than you usually buy, especially if they are analyzing day and time - most of us don't go on big shopping sprees on our lunch breaks.

[zetta]

I tend to do my clothing shopping in big sprees -- nothing for many months, then I buy a season's worth of new clothes in one trip. I used to always get calls to check for fraud, but I guess now they cards are used to my "pattern". We always call our cards to let them know before we visit the in-laws overseas so that we don't get blocked while on our vacations.

[b4freedom]

Originally Posted by MonkeyMama

Was the Wal-Mart purchase big? Could be why - if it was just a bigger dollar amount than you usually buy, especially if they are analyzing day and time - most of us don't go on big shopping sprees on our lunch breaks.

The coworker said it wasn't anything that would be larger then normal. But she doesn't typically shop at walmart either. I'm assuming that they have some sort of "fraud algorithm"that takes a lot of different types of data into account.

Someone just told me that if you make a purchase at XYZ store and then you make a purchase at ABC Online store, if a lot the same people made the same type of purchases at both stores a flag will get raised. The reason is that a lot of card numbers could have been stolen at XYZ store (by a clerk swiping it or a breach in their database) and then used at ABC Online store to purchase goods for fraudulent items auctioned off on ebay or something. For example, you bid on something on ebay, you send the guy money via paypal and three days later you get it in the mail. The guy who sent the stuff in the mail used a stolen credit card to buy it from another online site and had it sent to you.

This was just one example in probably millions of ways to scam someone. The credit card company feeds this information into a database that uses pattern recognition software. If this pattern is spotted elsewhere a flag is raised. Certain goods purchased raise more flags then other goods purchased.

Or at least that's what someone explained to me. I don't understand what kind of pattern a simple walmart purchase would fall into. And I don't know enough about the purchases made on my card to know what kind of pattern that was.

[carsensejoe]

none of my cards ever did anything like that for me..... you are very lucky yours does!!!

[corns]

I've been using credit cards for about 7 years now. Have bought countless of stuffs through the internet. So far no fraud yet. Whoever says internet transactions are not secure. I bet there are more frauds with face to face transactions than internet transactions.

[disneysteve]

Originally Posted by corns

I bet there are more frauds with face to face transactions than internet transactions.

Absolutely. Most CC fraud occurs when a merchant double swipes your card. This is very common in restaurants where you give your card to the waiter and he takes it away to run the card.

Online is much safer. The sites are secure an encrypted and your data isn't stored anywhere. No human ever actually sees the card info.

[sweeps]

Actually many sites do store your data and don't necessarily secure it well, hence the numerous personal data breeches we've seen in the last few years.

[jIM_Ohio]

those of us with math backgrounds can appreciate the detail of these trends.

Time of purchase
Amount of purchase
type of purchase
signature at time of purchase

then add to those variables prior spending patterns, prior signatures on file and that keeps mathematicians employed.

I have acredit card with my picture on it (citibank) and no one questions my wife when she uses it. We don't look anything alike (thank god).

[cptacek]

My credit card company called after I bought my home entertainment system to see if my card had been stolen because I didn't usually spend money on stuff like that. I said "No, just a moment of weakness."

[nitajaye]

Interesting timing, I just got a call from my credit card company that someone had tried to use my card.

The amount was $1.01, that was it. The lady told me that sometimes ppl or places will try to see if the card is open or usable before they try to make a big purchase. They are issuing me a new card and number.

I asker her how they knew this amount had been charged that morning and she said we have people who monitor these kinds of things all day long.

Made me feel good that they are on top of things and I am glad I have a card that I do not use, in case something happens before I get the new one in the mail.

[corns]

Today I added my credit card to my eBay account. The instant I click "Add", eBay verifies my card with the bank. No transaction or amount involved. Within a minute, my bank calls me up to check if I've used my card for the purpose of verification on eBay. @.@ Now I know these people monitors non-monetary activities as well.

[msnln]

I got a call last week from an online merchant (Tigerdirect.com) verifying a laptop purchase, which I did not make. They said it was routine check as it was a high cost item. When I told her I did not make such purchase, she recommended I contact the credit card company to ensure that my card number was not stolen.

When I called AmEx, customer service told me that attempt was made from the merchant to debit the account but then reversed. It looks like merchants are also getting very vigilant about fraud, which I think is great thing.

I had my credit card stolen from mail box few years ago. I eventually got all charges reversed and thief was caught but what hassel it was talking to card company for weeks, filing paper work, then eventually filing court papers to prosecute the thief.

[savemachine]

Interesting, what about when you're out of the country.

I charged my card in Canada, and in Thailand but my account was not suspended or anything.

I can understand Canada, but Thailand? Maybe they checked with someone to see if I'm really out of the country before they do anything?

[tinapbeana]

when i was going to be in argentina for a month for work, we called my bank and gave them advance notice and had no problems.

what we did have problems with was my LD company: they placed a block on my line after a week for possible fraud even though they also had advanced notice. the ironic part? the LD company was the company i worked for at the time and THEY were the ones that sent me to argentina! i put the appropriate international calling plan on my account personally and left full notes on the account regarding the situation and the necessary contact information if the fraud deparment needed to verify anything... oh well...

[greedy4chips]

For online purchases try using "1-time use" or "virtual credit card #s". Many credit card companies offer this now as a way to protect your credit card information from being stolen.

Read about it here Outsmart thieves with virtual card numbers

[Daylily]

That is really strange about the WalMart transaction. How would they know????
I've had one issue with fraudulent use. I always assumed that fraudulent use would have to be done over the internet or over the phone. Not so. The thieves actually made a card with my info on it. The credit card company called and asked if we had been to Las Vegas, El Paso and Mexico. There was a string of charges over a couple day period - and they were 'swiped' transactions. Someone actually had a card with my info.
We had our cards and hadn't had any mailed to us that we didn't receive.

[greedy4chips]

I am in the process of writing a computer program that uses a magnetic strip reader to read the encoded data on any card with a magnetic strip on it. For a mere $50 you can buy a reader and see exactly what is on any card. For another $450+ you can buy an encoder to encode blank cards which can be purchased for pennies and duplicate your card.

Imagine you hand your cc to a waiter or waitress and they have a card reader hidden somewhere and read your data. All they need then is exp date and cvs # and you are toast.