false credit alert

False Credit Alarm!

Erroneous fraud alerts are on the rise.  However, banks are now less likely to completely block transactions at the point of sale thanks to real-time tech features.

By: Jennifer Liu

Frequently purchase with plastic?

Then you might have noticed that your bank has become a little trigger happy when it comes to credit fraud alerts lately.

And thanks to the recent uptick in financial data breaches, you can start expecting them more often.

According to a recent survey from CreditCards.com, four in 10 Americans have had a transaction blocked or questioned by their card company—and of these alerts, almost 70% said at least one was on a legitimate purchase.

While this might make it seem like financial institutions are getting a little too cautious about flagging purchases, security experts aren’t exactly surprised.

With the rise in big data breaches—not to mention the growing sophistication of identity theft—banks are simply taking more precautions to ensure their customers’ financial safety.

And it turns out that some Americans are getting more credit alerts than others. According to the study, four key demos are most likely to get hit with a false alarm: college graduates, whites, those with an income above $75,000, and Republicans.

Seth Ruden, a senior fraud consultant at ACI Worldwide, told CreditCards.com that these groups might simply be swiping their cards more. “The more money you spend and the more transactions you make, the higher the chance that you’ll get caught in a breach or be subject to an alert,” he said.

But while these more frequent alerts can cause a few headaches, there is one improvement. Banks are now less likely to completely block transactions at the point of sale (as in, those heart-sinking moments when your card is declined at the cash register)—thanks to real-time tech features like text message alerts instead.

About the Author:
Jennifer Liu is an Editorial Assistant at LearnVest. She graduated from the University of Missouri with a degree in magazine journalism and also studied Spanish and sociology. Previously, she worked with the digital team at All You magazine with a focus on lifestyle content for budget-savvy women. She has also dabbled in music, entertainment, lifestyle and business writing.

Photo: Cheon Fong Liew