Sunday, November 10, 2013, AM | 2 Comments
Since February 2010 when the CARD Act went into effect, media have reported that card holders have been hit two-fold: 1) New fees and 2) high interest rates. In addition, the card issuers have been coming out with anti-fraud programs that for some could be a big annoyance but for others blessing in disguise.
If the purchase transaction on your card is legitimate, the alert in the form of unwanted messages, data breach risks and delayed access to your own account can be a nuisance at best and shutting down your account temporarily at worst.
The way the anti-fraud program works
When a purchase is made on your credit card, the issuer routes the transactions through what is known as fraud screens. These are smart programs that will potentially separate the good from the bad and catch irregulars and unlikely transactions.
Now, if an issuer suspects that a purchase is not legitimate, the card company may temporarily shut down the card in question while it contacts you, the card holder, to verify the purchase.
Get ready to monitor purchases yourself
Some issuers are seeking your help, as a card holder, by letting you manage and track your purchases via email, text messages and, most recently, cell-phone application.
Obviously, the card issuers ought to make this kind of arrangement with the card holders on a voluntary basis. They will use any persuasion on their books to try to attract you to these programs.
Credit Card issuers that have implemented anti-fraud programs
Recently, Wells Fargo and Visa came out with their Rapid Alerts program. It allows card holders to monitor their account activity. The program sends alerts via text message or email within seconds of a potentially fraudulent transaction, especially when an international purchase is made. Account holders are advised to set the criteria for a flag themselves.
Other issuers including Bank of America, Chase and American Express have for years offered the option for alerts to their customers in a variety of circumstances. For example, Chase and Bank of America offer to send out alerts, with users’ consent, when dollar limits for specific transactions are exceeded including ATM withdrawals or when their passwords and customer information changes.
What’s in “Alert program” for the card issuer
No matter whose fault it is, you as a card holder are protected in any fraudulent transactions. Your liability, last time I checked, is no more than $50. The rest becomes bad debt and is absorbed by the card issuers in the form of charge-off. In order to lower their damages, they will aggressively try to persuade you as a card holder to take part in their anti-fraud programs.
Overall, I think the alert program is a good one as long as you can opt out at your convenience. This is one of the few cases that we can help if we want to stop the increasingly high interest rates as well as the annual fees on our credit cards.
Even when these anti-fraud programs are successful beyond their dreams, there is still no guarantee that the card issuers will not raise interest rates and/or annual fees. If the success did not stop them from further sharpening these two edges of the sword, money they save will be a direct addition to their bottom line.
Typically, the card issuers will let customers opt in. It’s a good program if you don’t get annoyed with messages once in a while. If you do, hopefully, you can always unsubscribe to the alert text messages on your cell phone because that’s the one device you can get annoyed.
In a Nutshell
You can monitor activity on your credit cards yourself or you can join the card issuers so they will do it for you.