Fraud Protection Not Good Enough

Have you ever tried to do a lot of shopping in one day, using your credit card?  The credit issuers, attempting to prevent fraudulent use of stolen cards, have sophisticated computer programs that detect spending patters that are typical of stolen cards.  The programs pick up on combination of different transactions (gas, restaurant and a big purchase don’t go well together), as well as spending that is unusual for the cardholder. 

When the computer picks up suspect transactions, they put a hold on your card and a representative calls you to confirm the transactions.  The theory sounds good, but what if you’re still out shopping?  The next purchase you attempt results in your card being declined and you are “referred” to the credit card company.  That means that the people in line get to watch you get embarrassed; you get to call the credit issuer from the store (if you are lucky enough to have a cellphone) and everyone thinks you have credit problems.  Nice, really nice.

This happened to me the other day.  I just moved to a new house and needed some things.  I went to Canadian Tire for some supplies, went somewhere else to buy a lawn tractor, bought a new shower unit and then tried to get some supplies at Home Depot.  I guess I should have known.  Three strikes and I was out.  My card was declined.  To make it worse, a client was in line behind me. 

Here’s the interesting thing.  I realized what went wrong and called the card company on my cellphone, because I had more things to buy.  They asked me for to give them my birthday and some info that was on the card.  Then, I went through the transactions and verified them.  They reset the card and I kept shopping.

Now, if someone had stolen my wallet and made those purchases, they would have had everything that they needed to “verify” the transactions and keep shopping.  My wallet has my driver’s licence in it, which has my address and date of birth.  They didn’t ask for my mother’s maiden name or any information that was not readily available in my wallet.

What good is their fancy computer program if the guy on the phone does a lame job of ensuring that it is really me on the phone and not someone who has taken my wallet?

What really worries me is if someone stole my wallet and did exactly that.  Would the credit issuer make me pay for the fraudulent transactions because “I” had verified them?  Would I have to take them to court to deal with it?

With identity theft the most effective way to steal things these days, you need to be extra cautious about leaving traces of your personal information.  Tossing credit card receipts in the garbage or in the recycling bin leaves a thief all they need:  your card number, expiry date, name on the card and your signature.  Time to shop!

I recommend that, if you discard your receipts, that you shred or burn them.