Common Credit Card Fraud Alert Triggers
Key points about: What triggers credit card fraud alerts?
Out-of-the-ordinary spending can signal fraud to your credit card company.
Some credit card fraud alerts result from actual fraud, but it’s also possible to trigger a fraud alert yourself.
Understanding fraud alert triggers can help you avoid or resolve false alarms and detect actual fraud.
Your credit card company monitors your card activity to protect against criminals using your account. If they see something that looks inconsistent in your spending patterns, they might suspect fraud and place a hold on your account until the issue is resolved.
While receiving a credit card fraud alert may make you uneasy, not all fraud alerts get prompted by actual fraud. It’s possible to trigger a fraud alert yourself, even when making legitimate transactions. Learning common fraud alert triggers may help you prevent or resolve false alarms and detect real threats.
What is Credit Card Fraud?
Credit card fraud is a type of identity theft. It occurs when someone steals your credit card or credit card information (credit card number, expiration date, security code, personal information, etc.) and uses it to make a purchase or withdrawal without your permission. A thief may get access to your card information in many ways. Online hacks (that illegally access data stored on a device or in an online account) and card skimmer schemes (that use a device installed unlawfully in card readers to record your card number when you swipe to pay) are common examples of credit card fraud, according to the Office of the Attorney General of Maryland.
According to the Federal Trade Commission, in 2021, more than 2.8 million reports were filed detailing the loss of over $5.8 billion to fraud, with credit cards being the most common payment method. Fortunately, according to the United States Code, the Fair Credit Billing Act protects credit card owners from fraud, limiting the maximum liability to $50. And your credit card issuer may provide additional consumer protection.
What Flags Your Account for Credit Card Fraud?
Credit card companies offer consumer protection by monitoring your account for fraudulent activity. Sometimes your own spending may accidentally trip a credit card fraud alert.
This can be due to activities like making a large or international purchase (in person or online), an unusually high frequency of charges at once, or other activities that might seem unusual compared to your regular spending habits. Understanding what causes fraud alerts can help you anticipate issues, resolve false alerts, and confirm potential identity theft. Here are some of the things that may ring alarm bells:
Making large purchases
It’s common for a criminal to make a large transaction with a stolen credit card. So, if you don’t typically use your card for expensive items, making one or several large purchases may appear questionable to your credit issuer, especially if you meet or exceed your credit limit.
Making international purchases
Criminals can access your credit card information from anywhere in the world. That’s why your issuer may get concerned when they see a transaction outside your regular location. Using your card out of state can also mimic suspicious activity.
If you plan on making out-of-state or international purchases, you can alert your credit card company ahead of time to avoid false credit card fraud alerts.
Changes in spending behavior
Stolen cards are used for small purchases as well. That means even a less expensive transaction can send risk signals when purchasing several inexpensive items that you don’t usually buy.
Purchasing gift cards
If your regular spending pattern doesn’t include purchasing gift cards, purchasing a large number of gift cards at once can raise red flags. According to the Federal Trade Commission, buying gift cards with stolen credit is a favorite of scammers. Gift cards are easy to purchase, and scammers can continue using them even after your account is frozen.
How should you respond to a credit card fraud alert?
If your card issuer detects suspicious activity, they will place a hold on your account and may immediately notify you. Depending on your communication settings, the notification might be by phone call, text message, or email. At that point, you can confirm whether the activity is legitimate, and your credit card company can help you initiate a fraud report if necessary.
Reporting Credit Card Fraud
Knowing what may trigger a credit card fraud alert can help you protect yourself from real threats. If you believe you’re the victim of a credit card scam or theft, you can contact your card issuer to report suspected fraud immediately, hopefully stopping criminals in their tracks.
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