Yesterday was a day of two firsts for me.
- I welcomed into this world my 1st daughter, a new bundle of joy to go with my two sons.
- My Discover credit card account was deactivated in the afternoon shortly after using the credit card to buy lunch.
I’m writing this post to inform users that they are not immune to credit card fraud, it can happen at any time and any place if you use your credit card for both in store purchases or internet purchases.
I also want you to know there are some steps you can take to HELP the credit card company identify when fraud occurs. Most fraud that occurs is not your responsibility IF you notify the credit card company within a number of days when you recognize the charge. For me, Discover knew enough about my habits that it detected the fraud for me.
In my particular case, yesterday, I paid for lunch with the credit card, then went to pay for dinner with the same card and was informed my card was “not denied” but that the transaction was not approved. I used another card to pay for dinner.
When I got back to my computer, I tried logging on to the credit card website. I could not, my log in was deactivated and I was directed to call a telephone number. I also received a email telling me to call the credit card company, but did not receive a phone call or text.
When I called the number, it was to the credit card fraud department. After a number of identity confirming questions, I was informed my account was deactivated due to suspected fraudulent charges.
I was then asked if I made a $600+ purchase at a major department store in Irving, TX. I said no, I’ve been in NM all day and did not purchase anything from said department store. I was asked about a second charge, if I made a $500+ purchase from a major home improvement store, again in Irving, TX. I said no. I mentioned the last couple charges I did make and a dinner I tried to pay for yesterday. All charges were confirmed with an apology about the dinner.
I was then told my credit card was deactivated because of the two purchases, and that I will be receiving a new credit card and account number in the next 7 days. We re-verified my physical address. I’m glad Discover caught the fraud, but it means I have NO access to that credit line until I receive the new card and setup a new computer account. Being that I have a new baby now, this is a minor inconvenience, but not as bad if I had to pay for the fraudulent purchases.
I inquired more about the charges, in particular I asked if the charges were made using a “magnetic swipe” or just the account number, name, address, and security code. I asked so I could try and figure out where the source of my information came from. I was informed that a “magnetic swipe” was used to make the purchases, which means someone went through the effort to make a physical duplicate credit card and possible ID to make the purchases.
I also don’t recall receiving any letters in the mail from a internet merchant indicating their systems were compromised and credit card numbers (along with addresses) were stolen, but I suspect this may have happened. Companies are required by law to inform you if this is the case, but I’m sure most companies would try keep this quiet if they can.
I’d like to point out several things which I did to enable Discover to be proactive in disabling the account after fraud occurred:
- I used the credit card frequently enough for them to detect that I could not have possibly been in Irving, TX and Albuquerque, NM near the same time. In addition, the types of purchases were not consistent with the location if I had been in TX (meaning why was there a major purchase at a home improvement store when I was away from home?).
- I setup and access my account on the credit card company website and check it often.
- I took the further steps of setting additional notification options, I selected to be informed of major purchases beyond $400 and to be notified by email of those major purchases.
- I use Quicken to manage my finances, and I check all accounts two times a week, so I would have noticed the fraud charges if Discover did not. I’m really glad Discover caught this before I did.
Now that I have experienced a situation of credit card fraud, I am going to look into the following:
- Some credit cards, from their website, have the option to generate one time use (disposable) credit card numbers for internet purchases, although this can be a bit of a hassle for recurring charges, I plan on using disposable credit card numbers for internet purchases if it’s an option.
- When I traveled internationally, I told the credit card companies my travel plans (where I would be) and to possibly expect charges from those locations so I could use my line of credit while on travel. I am going to ask the credit card companies if this can be done on a state by state basis. I don’t want to make things overly complicated, but if I only travel in-frequently, it makes sense that “magnetic swipe” purchases be allowed outside my home state unless I explicitly say so.
- It was mentioned during the call that the credit reporting agencies would be informed of the changes (closed account and new one opened), I’m not sure of the impact of this on credit scores, but I’m going to investigate what the impact is.
Hope this writeup was useful, please comment if you have other experiences to add.
* Above photo is from Stuart Dootson via Flickr: http://www.flickr.com/photos/stuart-dootson/ / CC BY-NC-ND 2.0