Card Issuers May Know You Better Than You Think
Here’s a funny thought: your credit card company is watching you. Ok, perhaps it’s a little more creepy than funny, but you get the point. The fact is, while our signatures don’t really mean squat when it gets right down to it, our pattern of behavior does. What we’re spending money on, how much, and how often can easily raise a red flag to the credit card company.
According to an Amex insider, the fraud and identity theft department have people that sit at a computer scanning transactions all day long. Despite how incredibly boring that sounds on the surface, consider the implications that it carries. Someone somewhere knows exactly what you’re doing and they’re drawing conclusions about you, as well.
Amex says the employees who have access to such information are only using it to help prevent fraud and ensure your safety. They have the strictest privacy rules in place to make sure sensitive information is not compromised. However, rules or not, humans are going to make judgments based on the information they are given.
It’s the same for us in the banking industry. When we look over your account history because you’re complaining of an overdraft fee and see reckless spending, we’re not inclined to return the fee to you. It’s not necessarily to be spiteful or mean, but it is an effective deterrent for future carelessness. However, from a personal standpoint, that information says a lot about you as a person. We’re able to draw conclusions – albeit rather limited ones – as to what you’ll do next and the type of behaviors you have.
In terms of your credit card company, they work much the same way. The operators viewing your transactions may become concerned that you live in California, but you’ve suddenly got charges popping up all over New York. Admittedly, it takes a little while to figure out people’s patterns, but people by nature are creatures of habit and therefore, somewhat predictable. Once a pattern has been established, anything outside of that can be construed as a red flag. In most cases you’ll get a phone call.
If there’s a particular charge that seems out of place for you, your credit card company is more likely to just call rather than take any other actions. For instance, if you regularly shop at the Christian book store around the corner from your house, but one day you decided to do some shopping in an adult bookstore, that would more than likely cause you to get a phone call.
Other things like large purchases or seemingly random overseas usage could result in your card being temporarily deactivated. The best way to avoid this is to simply call the card issuer and let them know that you’ll be traveling overseas or that you intend to make a fairly large purchase. If they’re expecting it, there’s no problem. It’s when they don’t expect the charges that you could be severely inconvenienced.
Even still, I’ve never really considered myself a predictable person – especially in my spending habits. I’m a banker and ruled by my common sense in that area almost all the time. However, that doesn’t mean I always listen to my common sense. I’ve made erratic purchases, spent more than I should on things I didn’t need, traveled around the country using my credit card as the magical pass to get by, and not once have I ever received a phone call from my card issuer. I never called to tell them I was traveling or that I was making any weird purchases, but I still never received a call. So, I wonder if my credit card company just thinks I’m a random individual. How then, would they determine fraud on my accounts?
What about for you guys? Do you find that your spending is a tailored pattern or are you like me and just random? I’m curious to know what your thoughts are about having them watch your transactions. I mean, on the one hand, it does seem like an effective policy to help prevent fraud, but on the other, it just feels like an invasion. Tell us what you think!
Related posts:
- Credit Issuers Dig Deeper than Just Credit Reports
- Protecting yourself from credit card fraud
- Smartphone: The New and Improved Credit Card
- Government Credit Card Bloopers and You
- Identity Theft III: The Aftermath
yeah, it’s very weird. But when I used to work in credit card I would always look at people’s transactions. I mean, they are right there, kinda hard not to look… but sometimes I would think things about the person because of the charges I saw. Not necessarily bad, but I might think “wow this lady really likes shoes.” It’s weird how much you can know about a person based on where they spend their money. I mean, if someone looked at my charges they would know a TON about me.
I think it’s just life nowadays. Privacy is getting harder and harder to come by. If you don’t want anyone knowing where you spend your money then you are going to have to use cash. And even then… if someone really wanted to know they still could. The cameras are everywhere.
It really comes down to being an ethical issue on the part of credit card employees and even bank employees. I worked at a bank where a certain A-list star banked and I can tell you, there were many employees who “accidentally” typed in that account number to see where the individual shopped and their money habits. Personally, I think that kind of behavior is unhealthy and even more important, a danger to the customer because the account number was memorized. Eventually, the bank had to restrict access to everyone but managers. So, yeah, privacy is harder and harder to come by – even in banking.
[...] Kristy from Master Your Card warns that Card Issuers May Know You Better than You Think [...]
I travel frequently for work to unpredictable places, and as a result, I stared running into these “fraud prevention alerts” a few times. There never was any notice from any of my card companies that I should “alert” the credit card hotline about my upcoming plans – I just found out because my wife – panicking – called me overseas that the “security department” of some company had called about a suspected “stolen” card etc etc. While I applaud the good intentions of the card companies, the implementation is just BAD customer service. How as I supposed to know that my next trip to Brazil would cause my card to be deactivated, leaving me scrambling to call 800 numbers internationally to be able to pay the hotel. Yes, “severely inconvenienced” – and that’s probably an understatement. Card companies should be held liable for the (sometimes enormous) damage (yes, actual damage) they cause their customers through such actions – UNDISCLOSED is the operating word here. It would be one thing if customers were informed of the need to call ahead – but for this to happen behind one’s back at the worst possible moment seriously smacks of willful negligence. (Card companies, and the author above, KNOW that it may cause “severe inconvenience” and, unspoken but implied, actual damages.)
I was called by the anti-fraud guys even for charging $6500 of moving costs once. The trucking company called me frantically that my credit card (with a $35000 limit!!) was “declined” and that tomorrow’s scheduled move could not go forward if this was not worked out within the next hour! Thanks, Mastercard. (I did sort it out.) But hey, I had no prior “pattern” of regularly charging moving costs. (How would anyone?)
In any case, what such “fraud prevention” policies boil down to is that one now MUST call ahead in case of any form of unusual plans. It is essentially like asking “permission” to use the card for anything grown up. Lesson learned.