Fraud Alert--A Novel way to Prevent Credit Card Scams
Credit card companies are battling with frequent scams and frauds acting as deterrents to their growth--alongside creating mistrust and among their customers. Despite adopting new technologies and measures like chip-enabled cards and added PIN security, credit cards have simply failed to create a secure environment for the buyers. This problem of security is certain to affect the business in the long run as without safety there is no transaction happening.
Although the fraud insurance shares the burden, banks still have to control unwarranted transactions to sustain in the business. Interestingly in the recent times, banks have come up with a new method to auto detect frauds and prevent the transaction--fraud alerts. These alerts are generated based on the suspicious activity which is highly irregular from the card user.
Obviously, the purchase history and locations are considered before analyzing the data and arriving at a conclusion if the purchase is out of a fraud. When detected, an alert goes to the consumer asking him/her to review.
Here’s how a typical fraud may look like, “This is an email alert from the Fraud Detection Unit...As a security measure, we routinely monitor account activity to prevent fraudulent use of our customers' accounts. During a recent review, we identified activity on your account that may be related to fraudulent usage and need you to verify this activity as soon as possible. You can review this activity immediately by logging in to our website.”
The alert immediately alarms the user about the fraudulent activity and lets him/her block the card to prevent further transactions. Typically there are three types of fraudulent alerts:
Initial fraud alert -- This is alert is suitable for people who want to know if their financial information has been compromised or not. Moreover, it doesn’t require the user to file a police report or provide evidence to prove the breach really happened.
Extended fraud alert -- After the initial alert, you may want to take a look at a detailed credit report--two reports are given from all the three credit bureaus. For that, you need to opt for an extended fraud alert. It is offered for free in most of the banks and lasts for about seven years.
Active duty military alert -- Should you be serving in the military and deployed in a remote location, then you must opt for active duty military alert. This will minimize frauds and ID thefts while the user is deployed. It is quite similar to initial alert, but the alert is active for a period of one year.
Well, all the measures and protections are of little use if the users aren’t cautious about using credit cards on random, uncertified websites. It goes without saying that you must transact only on established, secure websites.