The rise in false fraud alerts

68% of Americans who have received a fraudulent activity alert from their credit or debit card issuer have received at least one alert in error, according to CreditCards.com.

53% said all or most of the blocked charges were legitimate purchases that were wrongly flagged by the issuer.

The following groups are more likely than average to have received a fraud alert:

  • 54% of college graduates (versus just 24% of those with no more than a high school education)
  • 53% of people with annual household income of $75,000 or greater (compared with 23% of people with annual household income under $30,000)
  • 48% of Republicans (against 36% of Democrats)
  • 46% of whites (almost double the 25% of non-whites).

The survey was conducted April 30-May 3, 2015. Of the 1,000 adults polled, 38 percent said they had been contacted about fraud at least once. A few findings about that group:

  • About 1 in 5 respondents (19 percent) said they were contacted about possible fraud on a credit card, compared to 14 percent who received alerts about a debit card and 5 percent who had an alert on both types of cards.
  • For some, the alerts didn’t catch any actual fraud. About 4 in 10 (39 percent) said every alert they received was in error.
  • For a smaller number, the system worked. Twenty-eight percent said all of the alerts they received were about transactions that were fraudulent.
  • The rest of the respondents received a mix of alerts flagging both legitimate purchases and fraud. Fourteen percent said “most” of the fraud alerts they received were in error, 8 percent said “some” were in error and 7 percent said “a few” were.

“Given all of the high-profile data breaches that have occurred over the past few years, card issuers are keeping a very close eye on potentially fraudulent transactions,” said Matt Schulz, CreditCards.com’s senior industry analyst.

“Most consumers we have spoken with seem to be okay with this trend, but people can help avoid errant fraud alerts by notifying their card issuers before traveling or making other unusual purchases.”




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