When To Really Worry About a Credit Fraud Alert

Senior man phoning the bank for credit card support.
Martin Dimitrov / Getty Images

If you have a credit card, then you know what it’s like to receive a surprise email, phone call or text message from your bank asking if you really just bought snow boots in Poughkeepsie — or brake pads in Omaha or dental work in Sacramento. 

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When you receive a credit fraud alert asking about potentially suspicious activity on your account, the first reaction is usually a combination of annoyance for the bother, dread about who has your card number and what they’re doing with it, and relief that your bank has your back. 

What you do in those next few minutes can have an enormous impact on your financial life and future. Here’s what you need to know. 

Start by Acknowledging Your Bank’s Efforts

Banks, credit unions and financial services companies like Visa and Mastercard have developed an impressive record of anti-fraud success. Visa, for example, has used AI and other advanced technologies to reduce its global fraud rate by two-thirds over the last 20 years, even as its transaction volume has jumped by more than 1,000%.

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It all starts with a text, email or phone call to verify a transaction and warn you that something might be wrong. 

If you receive an alert about suspicious activity on one of your cards or accounts, don’t blow it off. Your part will usually be something as simple as texting “1” if you recognize the transaction or “2” if you don’t. If it’s an email, you’ll probably be asked to simply click “yes” or “no” right in the body of the message.

If you don’t recognize the transaction, respond right away — that will set your bank’s anti-fraud wheels in motion, freezing your account, canceling the purchase and launching an investigation. But even if it’s a false alarm, you should respond with almost the same degree of haste. If you ignore it, your bank could play it safe by freezing your account until they can confirm the purchase. Frozen accounts lead to declined transactions, embarrassment and inconvenience — especially when traveling. 

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On that note, it’s always a good idea to let your bank know if you are planning to travel so it won’t flag purchases that are outside your regular geographic range.

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Watch Out for Anti-Fraud Fraud

Credit card fraud involves the transfer of both money and personal data, which means the road is littered with scammers trying to intercept both. Groups like the Federal Trade Commission (FTC), Experian and the AARP have for years warned people to be on the lookout for criminals who play on the trust that people place in their banks’ fraud department. 

In some cases, these scams start with a phone call from someone purporting to be from your financial institution’s anti-fraud division. In other cases, the scam starts with a text message asking you to confirm or disconfirm a suspicious purchase that you didn’t make — when you reply “no” to the text, a phone call from the imposter fraud-protection agent comes next. 

No matter the setup, the end result is the same. The fraudster — who pretends to be protecting you from fraud — solicits your account numbers and passwords to “work through the problem,” “fix the issue” or “cancel the fraudulent transaction.” 

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In many cases, they’ll say they need this information to verify your identity for your own security. There have also been reports of scammers asking victims to send money through a service like Zelle, with the ruse often being that they have to confirm that the account is unfrozen.

How To Tell a Fraud Alert From a Fraud

Keep an eye out for telltale signs like: 

  • Incorrect spelling, punctuation or capitalization
  • Long, unfamiliar or otherwise sketchy URLs
  • Any solicitation of personal information beyond the regular security checks (DOB, last four digits of your Social, etc.)
  • Any request for a transfer of money
  • Any request for full account numbers or passwords
  • Pressure to act immediately

If you’re unsure, do not respond to any suspicious text or email and instead contact your bank’s fraud department immediately to validate the authenticity of the communication. If a phone call from your bank seems suspicious, hang up right away and do the same.

Take Action With a Fraud Alert of Your Own

When your bank alerts you to suspicious activity on your card, the only thing you can do is respond reactively — but you can build a wall around your credit and your entire financial life by proactively asking lenders and creditors to be extra careful with your accounts.

If you suspect someone might have stolen your identity or gained access to your personal or financial data, you can set up a fraud alert of your own. This kind of proactive fraud alert requires financial institutions to take extra steps to verify your identity before issuing you credit, which makes it harder for scammers to open new accounts in your name or modify your existing accounts. 

All you have to do is request a fraud alert from one of the three credit bureaus — Experian, Equifax and TransUnion — and that one will pass your request over to the other two. The alert will remain in place for one year, but if you have a police report or FTC report documenting your status as a fraud victim, you can set up an alert that will last for seven years. There are also special fraud alerts for active-duty military personnel.

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About the Author

Andrew Lisa has been writing professionally since 2001. An award-winning writer, Andrew was formerly one of the youngest nationally distributed columnists for the largest newspaper syndicate in the country, the Gannett News Service. He worked as the business section editor for amNewYork, the most widely distributed newspaper in Manhattan, and worked as a copy editor for TheStreet.com, a financial publication in the heart of Wall Street's investment community in New York City.

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