How Credit Card Companies Detect Fraud

Credit Card

It may not be readily apparent to you, but your credit card company tracks your every move. Purchasing patterns, location, and other forms of analyzed data are used to keep you and your money safe from those who attempt to steal it. While many companies are alerted to potential fraud by the customers themselves, they use these testimonials to better identify similar instances of fraud for future use. Here are just a few of the ways credit card companies are keeping your money where it belongs:

  • Location Spending Anomaly: If your financial history has you making purchases in certain geographical locations on a consistent basis, your credit card company will expect you to keep making purchases there. For example, if you make common purchases confined to specific places and a transaction shows up on your history that’s hundreds of miles away or online, your credit card company may contact you to confirm if the purchase was made by you. If it wasn’t, the charge will be declined.
  • Unauthorized Recurring Payments: Online purchases can be risky business when visiting a website that you’re unfamiliar with or doesn’t feature secure pages for payments. In the event that a website does get a hold of your card information and decides to enter it into a system for monthly payments, your credit card company will cancel those payments from going through. If a website is flagged for making fraudulent transactions on another customer’s account, it allows your credit company to notify you sooner.
  • New EMV Technology: EMV stands for Europay, MasterCard, and Visa. This technology will put a computer chip inside your credit card which generates a dynamic transaction code. This prevents counterfeit card purchases at the point of sale. For example, a fake card reader at an ATM won’t be able to steal your card information with this new chip.

While these methods of fraud detection and prevention are all ways that your credit card company keeps your money from falling into the wrong hands, it’s important to keep track of your card and your own purchasing history. The only way to be absolutely certain your finances are secure is by monitoring them yourself.

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