Are Fraud Alerts Improving?Consumers Want Banks to Keep Them in the Loop
About a year ago, those alerts also saved me. After my debit card was compromised - at a location yet to be determined - my account got dinged several times between a Friday night and Saturday morning, days fraudsters know banks are often slow to pick up on and react to fraud.
But because of automated alerts, I awoke that Saturday morning to a string of text messages from my institution, notifying me of retail transactions exceeding certain amounts. Those messages were soon followed by alerts about my account being overdrawn and frozen because of suspected fraud.
I felt relieved that my institution was watching my account so closely, and that it had invested in systems and technology that immediately notified me.
The ordeal worked out. I got reimbursed for the fraudulent transactions. But because the initial signature debits [my PIN was not compromised, thankfully] were approved by the bank, my checking account was drained. And it took days for the bank to investigate and reimburse the funds.
That was a bit of a hassle: Ultimately, I had limited access to cash for about a week.
My issue was just one of a multitude that banks and credit unions face daily. And recent waves of retail fraud, often linked to card compromises at merchant locations, highlight why it's so critical for card issuers and consumers to catch fraud sooner, rather than later.
A case in point: the card breach at Modesto, Calif.-based Save Mart Supermarkets. So far, fewer than 1,000 cardholders are believed to have been hit by the point-of-sale breach discovered by Save Mart in late November. [See Fraud Scheme Hits Grocer.]
And let's not forget the Michaels POS breach, which in May hit stores in more than 20 states. Card-readers and PIN-pads located on cashier POS systems in 90 Michaels stores were swapped with readers and pads manipulated to copy and transmit card details.
Some industry pundits suggest more consumer involvement, through text alerts and interactive alerts and messages, could drastically reduce fraud. I have to agree. And I think banks appreciate this notion, too. I see it in the interactions I have with my own institution.
Last week, I was traveling for business, using my debit card at retailers and hotels in towns (and in a state) I don't frequent. I used my debit card once as backup for incidentals when I checked in at the hotel. No problem. But when I went to use it at the mall, a couple of days later, my transaction was declined.
Twenty minutes after trying to make the mall purchase, I got an automated phone call from my institution's fraud-alert department, asking me to confirm that I had, in fact, just visited a certain retailer, attempting to make a purchase for a specified amount. The automated system then asked me a host of other questions, including my visit to the hotel a few days earlier.
I was impressed. With the entry of a few keys on my iPhone, I was able to let my bank know where I was and that I had initiated the aforementioned transactions.
As a consumer, I felt relieved that my institution was watching my account so closely, and that it had invested in systems and technology that immediately notified me, to rectify the issue.
That is all proof to me that financial institutions are improving, and making investments that not only involve consumers, but improve security.