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Why banks stop your purchases (and what you can do about it)

Matt Schulz

Like it or not, your credit card company is watching what you buy, where you buy it and  how much you spend on it.

One of the big reasons for this: sniffing out fraud. 

credit card fraud false alarms

In the wake of huge headline-grabbing breaches at Target, Michael’s and other retailers, banks are constantly on the lookout for purchases that might seem strange or out of character for a particular credit card holder. Oftentimes, they’ll call or text a cardholder if something looks unusual. They’ll even decline a purchase if it seems iffy.

But what exactly makes a purchase look sketchy? Don’t know? Don’t feel bad. According to the latest survey, many of your fellow cardholders don’t either. (See “Poll: As card fraud rises, do do false alarms.”)

Forty percent of active cardholders said they “have no idea” why banks think a purchase is unusual. That’s somewhat understandable, though. After all, banks aren’t exactly eager to tell — for the same reason that a cop doesn’t tell a drug dealer where the next stakeout will be.

But even though banks aren’t being terribly forthcoming, their actions have provided some clues as to what might trigger a fraud alert.

Here are three major ways you may accidentally create a false fraud alarm:

  • Location, location, location: In my experience, travel has been the most common trigger. Foreign vacations will often trigger alerts, but even travels within the good old U.S. of A can raise red flags. For example, I tried to rent a car near Los Angeles International Airport at the start of a vacation with my wife and son and my credit card company refused the transaction. A few texts and a phone call later, all was well, but having to take those extra steps was inconvenient.

    You don’t even have to leave your hometown to trigger an alert. There have been reports that even purchases in different areas of town can set off alarms with your credit card issuer. Also, since fraudsters have been known to test out stolen credit cards at gas stations, too many trips to the pump in too short a time can set off alarms.

  • Big spending: If you’ve never bought anything bigger than a nice family dinner on your credit card and then you buy a new 55-inch TV, a trip to Hawaii and a high-end laptop computer, don’t be surprised if some of those purchases get flagged.

    I’ve also heard multiple stories of people having purchases flagged — or outright denied — when they are doing a major remodeling on their house. Purchasing all of that lumber or lighting or whatever from Home Depot or Lowe’s when you normally just go there for potting soil and gallons of paint will make the credit card issuer look twice at you.

  • Online shopping sprees: Online shopping is a different animal altogether, since it doesn’t require you to have a card to make a purchase. That makes fraud a bit easier and makes banks take a look at purchases a bit closer.

    Buying your son a new baseball glove on Amazon may not set off any alarm bells, but buying five or 10 items at a time might, especially if they are big-ticket items. And if you make any online purchases in a foreign currency — perhaps a piece of art from Japan or a piece of clothing from Italy — that could draw your card issuers’ eyes, too.

Patterns matter
In short, it’s all about patterns. If you live in Wichita, Kansas, don’t travel much, and suddenly make credit card purchases in Los Angeles, Miami or Paris, expect to get a call from your credit card issuer. While it may be strange to you that your purchase patterns are being monitored that closely, it’s a reality of shopping in 2014, and ultimately, it can be a good thing. That’s because even though some legitimate purchases might get flagged and you might feel annoyed and inconvenienced, when the day comes that some fraudulent purchases are flagged, you’ll be glad that they were spotted when they were.

According to our survey, most cardholders understand that. Only 6 percent of active cardholders say banks block too many transactions, and 23 percent even say that banks don’t block transactions often enough. 

How to avoid getting your purchases blocked
Whatever your view, there is an easy way to reduce the number of fraud alerts that you face: Call your issuer.

Family trip to Disneyland? Call your card company and let them know.

Adding a new game room on to the house? Give your issuer the heads up.

Buying a lot of things online for your kid’s school or baseball team? Let your issuer know.

You can call the number on the back of your card; alternatively, an increasing number of banks let you set a travel notification online. A very few, including Bank of America, let you set travel notifications on their mobile app.

In other words, when in doubt, make the call or go online. It may seem a bit inconvenient, and you may not always think about it, but a little bit of forethought can go a long way. After all, you’d much rather make that call from the comfort of your own home than have your vacation disrupted by a phone call in a rental car parking lot when all you really want to do is take your wife and kid to the beach.

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  • Nick Spanlopis

    Are you sure it is only 6%? I think that poll needs to be run again. I have had 4 transactions blocked one after where a verified one, bank was good, and then they immediately blocked the next transaction, and again and again. This overzealous blocking and freezing of accounts is getting out of hand. What am I to do if I don’t have access to a phone and my account gets frozen in an emergency? This is an unacceptable situation.

    • Daniel Ray

      Hi, Nick, and thanks for writing.
      You’re commenting on the 2014 version of the poll, and we actually did run that poll again last year, and it had similar results. See

      One passage you might be interested in from the newer story is this:

      … Experts we talked to said Visa tracks decline rates by issuer and proactively reaches out to those that seem to be blocking too many transactions. “We want our product to be the safest, most convenient and seamless way to pay so we will say, ‘We need to work with you on your authorization rules because your decline rate is too high,'” he said.
      Even when an anti-fraud system is working well, only about 1 in 5 suspected transactions that are declined at the point of sale turn out to be an actual fraud, Nelsen and Stewart said. The rest of the time, it’s a false alarm. Because consumers don’t mind the after-the-fact alerts as much, most issuers allow much higher false positive ratios for those — as high as 25 to 1. …

      I think people are of two minds about these alerts. They don’t want false positives, of course, but they like the idea that fraudulent transactions will be stopped. Visa just a few days ago nudged its card-issuing banks to send out more text messages when they see potential fraud. But you’re right, of course, that if your account gets frozen and you’re away from your phone, you’re stuck. We recommend carrying a backup credit card, especially when you’re traveling.

  • Sean Nicholas Harmon

    ok while it makes sense the bank should not block you when you have the money in the bank account and used the amazon account that belongs to the owner of the card just because the person is trying to buy computer parts on amazon for a family member it’s insanity

  • cosmic.dave

    I just found out today that my local KS bank has put a block on any purchases made by debit card where the base of sale is in California. I found this out by trying to reactivate my Netflix account and wasn’t able to. I chose the PayPal option. I was told the reason for the decision was because of “all of the fraudulent activity in California”. I was then informed that going forward my recurring purchases i have set up, if they are based in CA, will no longer be honored and that I should seek other alternatives like credit cards, money orders, etc. if they involve any purchases in CA. This may include my PayPal account too as they are based in CA. A few years ago a block was put on international purchasing, which many banks do with debit cards so I didn’t think that was out of the ordinary. But this is ridiculous. Especially when these debit cards have a Visa backing? I’m unclear how this protects me, the customer. It certainly inconveniences me. This doesn’t seem like normal practice and I have no way of knowing if this is selective or other customers are being subjected to this. Thoughts?

    • Daniel Ray

      Blocking any transaction based out of California? That does sound excessive. We keep a pretty close eye on debit and credit card fraud reports, and while California, as the most-populous state in the union, certainly has its share of fraud, so do the other 49 states. If you don’t mind revealing, what bank?

  • Aca

    My bank call me for every $1500 or
    more to purchase over the internet to check it. I really do not know what
    credit card is useful for. Even I have to tell my bank if I go to Europe what country exactly, due to
    allowing transaction. If I decide to spend some time in another country without
    telling my bank that I am there, again problem. What is purpose of credit card?
    It is better for me to use cash – It is freedom. So, I use cash.

  • Aca

    If we chipped instead to use credit card it is worse than
    use cash in your pocket.

    Someone will cut you hand to get chip. If I have money in my
    pocket he will take money from me only, no problem at all except money.

    It seems that this civilization goes in wrong direction.

  • jsj

    I am planning a trip to Germany. I ordered tickets from the Deutsche Bahn using a BofA Visa card. I called the number on the back of the card to report the purchase. I was informed that it would be okay. Today I was informed by the bank that the transaction was refused. I called the # on the card and was told that advance notification that I had made was never permitted. I was also told that standard procedure is 1. Make the Purcahse and have it refused. 2. Tell the bank that the purchase should have been approved. 3. Make the purchase again. And then presumably hope that it goes through and that the original one will not be resubmitted and also go through.
    I also gave my travel plan over the phone. When I checked later I was told that no travel plan was on record and that I should do it on line. It’s okay to do it on line, but why was it “accepted” on the phone and then ignored?