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Why Is My Card Being Blocked?

Debit Card Fraud Prevention and the Algorithms That Help 

Debit card fraud. We are all aware that it is happening, and we all know the basic steps to preventing it: don’t give your card number out to a stranger, only use trusted websites for purchases, and never save your card information online. But what other ways are out there to help prevent card fraud?

Most financial institutions use a fraud system that actively blocks transactions it believes to be fraud. Here’s how it works: when you swipe your card at a terminal or type it in online, you see either “authorizing” or “processing”. During this seconds-long window, the computer system that runs the card network performs thousands of computations. It looks for things like signs of counterfeit cards, account balances, location of the transaction versus the address on the card, the type of transaction, etc. It uses this information to give a probability of fraud, and in general, when that probability is over 30%, it blocks the transaction.

Sometimes, legitimate transactions get blocked for various reasons. This can be frustrating, but remember that this system is for your protection, and it is nothing personal! (It is literally a computer making a decision based on data and probabilities!). It is estimated that card fraud losses total about $30 billion per year, and that total is only 5 – 10% of the actual attempted fraud – all the rest is blocked by fraud systems. In fact, without fraud systems in place, card systems wouldn’t be a viable payment option.

So, what else can you do to make sure that legitimate transactions make it through? Make sure to always keep your phone number, address, and email updated with the bank. If you plan on leaving town, call ahead and put a travel notice on your account. Finally, you can set up alerts with online and mobile banking to know when your debit card is being used, and to easily identify any fraudulent transactions. 

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