Credit Card Fraud Detection Policies Of Major Issuers (2024)

Credit card fraud detection is a set of tools and protocols which card issuers use to detect suspicious activity that could indicate a fraud attempt. These tools are generally proactive, aiming to stop credit card fraud before it starts. They also help to prevent financial losses caused by credit card fraud.

Credit card issuers have several ways to detect and intercept fraud by analyzing transactions in real time to identify unusual activities and patterns.

These methods aim to reduce the occurrence of fraud. They also look to avoid false positives, where fraud is detected when making legitimate transactions. Both can be costly for financial institutions and customers, so it’s prudent to prevent them before they happen.

If you shop with a credit or debit card, it’s important to protect your identity and finances. The following precautions can help keep you safe:

• Set fraud alerts.Most major credit card issuers allow you to set alerts for events like transactions above a certain amount, overseas purchases or any purchase that might be unusual.
• Monitor accounts regularly. Although credit card issuers attempt to identify fraud automatically, detection algorithms could occasionally miss a fraud attempt. Therefore, you should monitor your accounts online or via a mobile app.
• Review your credit report.Regularly reviewing your credit report can help you spot suspicious activity, including potential fraud. You can request one free report per year from AnnualCreditReport.com, which is authorized by federal law.
• Use a credit monitoring service.Credit monitoring services scan your credit report in real time and alert you of potential fraud. Some are free, though many charge a fee.
• Freeze your credit.You can freeze your credit while you are not applying for new lines of credit. This will prevent others from using your information to open credit cards or other lines of credit in your name.

If you notice suspicious activity, report it to your card issuer immediately. The faster you act, the better your chances of having fraudulent transactions reversed and preventing new ones.

Credit card issuers use various methods to detect and prevent fraud. Common protocols include:

• Machine learning: Also known as AI or artificial intelligence, this allows computer systems to use past transaction data to learn about patterns of normal and abnormal activity.
• Anomaly detection: Identifies patterns of activity that are well outside the norm. This might include transactions completed at unexpected times or locations or a sudden spike in transaction amounts.
• Real-time scoring: Each transaction receives a risk score based on the issuer’s criteria. High scores may automatically block transactions or require your authorization.
• Social network analysis: Analyzes relationships between cardholders, merchants and devices to detect patterns that may indicate fraud.

Although card issuers often use algorithms, there is usually still human involvement. Fraud analysts review flagged transactions and make adjustments to the system as needed.

Credit card issuers have their own fraud detection policies to protect themselves and their customers. Here, we’ll explain how major issuers protect their customers against fraud.

American Express

American Express is constantly on the lookout for suspicious account activity. If it spots anything unusual in your spending patterns, you will receive an alert via push notification, text message or email, depending on your preferences. You can then indicate with a single tap or click whether you conducted the transaction.

If you think you’re the victim of fraud, American Express recommends calling its helpline immediately at 800-528-4800 or by using live chat when logged in to your account. If you travel more than 100 miles from home, you may be eligible for 24/7 assistance and coordination services. The company also provides card assistance while you are abroad.

Capital One

Capital One provides its customers with real-time fraud alerts. You can set alerts for certain types of account activity or for transactions Capital One believes need a second look. If a transaction doesn’t seem right, you can either get more details or dispute it. There is also fraud reporting, which allows you to click “report a problem” on a transaction if there is an issue with it.

Capital One has $0 fraud liability for unauthorized charges, so you won’t be responsible if your card is lost or stolen. The card issuer also has advanced security features, such as facial recognition, fingerprint ID, virtual card numbers and card lock/unlock capability.

Chase

Chase monitors accounts 24/7 for fraud and can call, text, or email you if there are unusual purchases on your credit card. It also has Zero Liability Protection, so you won’t be responsible for unauthorized purchases made with your card or account information. Chase recommends calling the number on the back of your card if you see an unauthorized charge.

In addition, Chase’s chip-enabled credit cards provide enhanced security when making purchases worldwide. Lastly, you can lock and unlock your card if you misplace it. Chase recommends updating your phone number in case the issuer needs to contact you.

Citi

Citi has advanced security features to help protect your account. For instance, Citi monitors accounts and will flag suspicious activity on your card and may contact you by phone, text or email to confirm the transaction. For select Citi cards, you’ll receive a text message from short code 95686 if the issuer detects unusual activity.

The issuer has a $0 liability policy for unauthorized transactions with consumer cards. Many Citi consumer-card customers can also generate single-use virtual card numbers when shopping online to protect your real card number. If you’ve responded to a potentially fraudulent email, you can send an email to spoof@citi.com.

Discover

Discover monitors accounts with proactive fraud monitoring and enhanced account verification. These tools constantly monitor your account and notify you if suspicious activity is detected. However, Discover recommends regularly checking your statement for suspicious purchases. If you find a purchase you don’t recognize, you can initiate a dispute or contact customer service.

If there’s a fraudulent charge on your account, you won’t be held liable thanks to Discover’s $0 Fraud Liability Guarantee. You can verify transactions online or by calling 877-737-1931. You can also freeze your card to stop any new purchases and activity on your account.

It’s incredible and reassuring how major card issuers are using innovative technology to combat the rise of fraud and identity theft. But prevention is better than intervention, and there are precautions you can take to protect your accounts.

When you can, use mobile pay or a virtual card number to shield your information—and always keep your card in a safe place, spend at trusted merchants and regularly review your transactions.